Welcome to Stock Market 101. I, like many people, have often wondered what the heck is going on in the stock market. I'll be the first to admit, I've spent most of my life being entirely clueless. Everyday on the news we hear about about what the stock market did today. When the stock market is on a downturn, we tend to hear about overall economic problems. I decided that if it's that important, I better get a handle on it.
I created Stock Market 101 as a place for people to join my ride into learning about stocks. I've always found the best way for me to learn is to try and teach. As I learn new things, I'll share them here and hopefully we can all be better for it.
This first post is a basic explanation of what a stock even is. A stock represents part ownership of a company, or a "share" of its ownership. When you own a stock, you own a slice of that company. Now, realistically, you don't have any real say in what goes on in the company. When you purchase a share, you assume the same risks you'd take on in owning that business. If it fails, your stock will be worthless, if it succeeds, your stock will increase in value. When you own a stock, you have a claim to the assets of the company. Fortunately, stockholders don't assume liability for the company. If the company released a faulty product, for example, you wouldn't risk facing a lawsuit. However, such news would likely hurt the company and the value of your shares.
There can be a bit more too it, but that's essentially all a stock is. A piece of paper giving you a small sliver of ownership.
