Asset classes
Stocks, funds, bonds, crypto — what's what?
A stock is exactly what it sounds like: a share of a company. Buy one share in Apple and you own a tiny sliver of Apple.
Why does the price go up and down?
In the short term: sentiment, news, rumors, interest rates. In the long term: the company's profits. A company earning more money year after year becomes worth more over time. A company losing customers loses value.
What do you get as an owner?
Two things. First, a claim on a share of future profits (sometimes paid out as dividends). Second, voting rights at the shareholder meeting — though for most small investors this is mostly symbolic.
The risk of individual stocks
A company can go bankrupt, and then your money is gone. That's why you always diversify — either by holding many stocks, or through funds that spread the risk for you.
Stocks mean ownership in a company. Historically the best long-term returns, but individual companies can fail. Always diversify.
Add your holdings in My portfolio →What do you own when you buy a share?