There are 2 main sorts of investment products, equity investments and debt investments. Equity investments involve ownership of an asset while debt investments involve lending your cash with the expectancy of a return of your original investment plus interest.
One of the commonest forms of equity investments is stock. Stock represents ownership in a business. Company stock is separated into shares, with each share representing an equal level of ownership in the company. Owning stock in a company gives you the inalienable right to participate in the financial fortunes of the company, that may involve losses as well as gains. Stock ownership also generally grants you voting rights at the organization's yearly shareholders ‘ meeting. Each share of stock receives one vote toward electing the company’s board.
Stock is sometimes traded through third parties called stock brokers on an exchange, eg the London Stock Exchange, though there are major stock exchanges found around the planet and it's possible to trade stocks literally fulltime. Stock trades are conducted through a double auction market employing a bid and ask system. Stockholders who'd like to get a particular stock will enter a bid order for the quantity of shares they would like to purchase at a selected price per share. Investors who want to sell their stock will enter an ask order designating how many shares they have for sale and the price per share they wish to obtain. When a purchaser and seller are discovered that are prepared to trade at the exact same price the transaction is finished.
You can make money from stocks and shares thru capital increase or thru dividends. Capital increase involves selling your stock for a heftier price that you paid for it. Dividends represent a portion of the profits earned by the company, which are paid to the stockholders as set by the corporation's board.
While the trend for the exchange in total has been positive for the last century, there is risk associated with making an investment in individual stocks. There isn't any guarantee that you'll make cash on your investment.