What are stocks/shares?
‘Stock/Shares’ is the term that is used to describe a share in the ownership of a company. Each share is worth a certain amount based on the overall worth of the company. When you buy shares of a certain company, it essentially represents your ownership of a small portion of a public corporation. Let’s understand this with an example: Mr. A wants to start a factory. But for that, he needs to invest Rs 10 lakh. However, he has only Rs 2 lakh with him. He asks 4 of his friends to invest the remaining money. In return, he gives them each 20% of the company’s/factory's ownership. Mr. A's business is performing exceedingly well after five years. His factory is now valued at Rs 50 lakh. That means the value of Mr. A and his friends investment has increased five times. Similarly, you can buy shares in a public compan...