Stock

When a company wants to raise money, it can sell ownership stakes to investors. Those stakes are called stock or shares. If you own stock in a company, you are one of its owners, alongside all the other shareholders.

Stockholders can benefit in two ways. If the company grows and becomes more valuable, the price of its stock usually rises, and owners can sell at a profit. Many companies also pay part of their profits to shareholders as dividends.

Stock carries risk. If the company performs poorly, its stock price can fall, and if it goes bankrupt, shareholders are paid only after lenders and other creditors, often receiving nothing.

The word "stock" is often used generally, as in "investing in stocks", while "share" refers to a single unit of ownership. In some countries, especially the United Kingdom, "shares" is the more common word, and "stock" can also refer to certain government bonds.