Overview of Shares – An Overview of Stocks

Stocks are all the stocks in which ownership of a company is divided up. In American English, the stocks are collectively referred to as “stock”. A single share of this stock represents a fractional ownership in agreed percentage to the whole number of stocks represented by that company. The stocks are listed on the books of a company and are usually traded on exchanges. They are also sold to the public through brokers.

stocks

The principal objective of trading in stocks is to achieve profits from the sale of a particular number of stocks. The profit or reward to an investor is calculated by subtracting the costs of acquisition or of sale from the potential gain. The stocks are bought at a specific price. There is no physical storage or safekeeping of stocks, since they are sold to others. But, there are certain regulations that traders have to follow to protect their ownership rights.

The buying and selling of stocks are not a very risky venture, provided that the person is careful. One can buy small amounts of stocks every day and as these stocks increase in value, so will the amount of money that one can make. But, it is important to remember that one should not invest all their money in one way. One should diversify their assets and not put all their eggs in one basket. Diversification of assets and income is the best way of protecting oneself against financial losses that might occur because of a catastrophic event such as a decline in the value of an investment or a default of a company.