A stock represents a claim on the assets and earnings. As you acquire more stocks, your ownership stake in the company becomes greater. Sometimes different words like shares, equity, stocks etc. are used. All these words mean the same thing. Holding a organization stock means that you are one of the many owners (shareholders) of an organization and, as such, you have a claim to everything the company owns. This means that technically you own a tiny little piece of all the furniture, every trademark, and every contract of the corporation. As an owner, you are entitled to your share of the company’s earnings as well. These earnings will be given to you. These earnings are called “dividends” and are given to the shareholders from time to time. Making money from the stock market will be the easiest way earn money.
If you hang onto a stock that has gone up in value, you have what’s known as unrealized gains. Only when you sell the stock you can lock in your gains. Since stock prices fluctuate constantly when the market is open, you never really know how much you’re going to make until you sell.
A stock is represented by a ’stock certificate’. This is a piece of paper that is proof of your ownership. However, for now you could also have a “demat” account. This means that there will be no “stock certificates”. Everything will be done though the computer electronically. Selling and buying stocks can be done just by a few clicks. Being a shareholder of a public organization does not mean you have a say in the running of the business. Instead, “one vote per share” to elect the board of directors of the company at annual meetings is all you can do. For instance, being a Microsoft shareholder doesn’t mean you can call up Bill Gates and tell him how you think the corporation should be run.