Fractional ownership in public companies
Stocks
What is it?
A stock represents ownership in a company. As a shareholder, you have a claim on future profits and, sometimes, voting rights.
How does it work?
You buy shares on a stock exchange (like NSE, BSE, NYSE). Prices fluctuate based on business performance, market sentiment, and macro factors.
Benefits
- Long-term wealth creation
- Dividends (some stocks)
- High liquidity
- Ownership in real businesses
Risks
- Prices can fall sharply
- Individual companies can fail
- Requires research or diversification
Important terms
- EPS
- Earnings per share.
- P/E
- Price divided by earnings — a common valuation ratio.
- Dividend Yield
- Annual dividend as % of share price.
Common mistakes
- • Chasing tips
- • No diversification
- • Trading emotionally
- • Ignoring valuation
Beginner tips
- • Start with index funds/ETFs before individual stocks
- • Invest for 5+ years
- • Never invest borrowed money
Educational only. This page explains how stocks work. It is not a recommendation to buy, sell, or hold any specific asset.