Investing 101: What is a Stock?
When a company needs to tap into some serious cash, they have a few options to consider, one of which is to sell shares of stock to investors. Whether they need the funds to open a new location or hire new employees, a business can raise the capital they need to reach their financial goals without borrowing the funds from the bank. In essence, when a company sells a share of stock, they are selling a part of their business to the investor. As an investor, when you purchase a share of stock, you become a joint owner of the company. While you might not have any say in the day-to-day operations of the business, you do get a part of the assets and (more importantly) the earnings of the company.
However, you’re not the only investor with shares of stock. When you purchase a share of stock from a company such as Microsoft or American Airlines, you’re just one of the many shareholders. How many shares you purchase is up to you and your budget. How much you purchase the stock for depends on the company, and just because a stock is expensive doesn’t mean it’s going to bring in the big money.
Before you invest in a company, make sure that you learn all that you can about investing in stocks, such as the various types of stocks (because there are thousands to choose from), how to assess the value of stocks (hint: there is more than one factor to consider), and what makes a smart portfolio.
This blog post was provided by Plan B International, an experienced real estate agency located in Florida. To learn more about the company’s investment opportunities in Miami and South Florida, please visit Planbinternational.com.