Investing Basics

What Is a Stock?

A stock is a security that represents partial ownership of a company. Each unit is called a share. Shareholders may benefit if the company's share price rises or if it pays dividends, and they bear losses if the price falls. Stocks of public companies are bought and sold on stock exchanges.

Common vs. Preferred Stock

Common stock usually carries voting rights; preferred stock typically has priority for dividends and in liquidation but often no voting rights.

How Returns Arise

Total return combines price change (capital gain or loss) and dividends received.

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🔗 Related Terms

Dividend Bond Capital Gain Volatility Price-to-Earnings Ratio (P/E)

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.