Stocks
Definition
Stocks represent ownership shares in a company. When you buy stocks, you become a partial owner and have the potential to earn profits through dividends and capital appreciation.
Analogy
Imagine buying stocks as purchasing slices of pizza from your favorite pizzeria. Each slice represents a share of ownership in the business, and just like how the success of the pizzeria can increase the value of your slices, successful companies can increase the value of their stocks.
Related terms
Dividends: Payments made by companies to shareholders as a portion of their profits.
Market Index: A measurement that tracks changes in stock prices for specific groups of companies.
Initial Public Offering (IPO): The first sale of stock by a private company to the public.
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