Anonymous

18 Apr 2019

∙

What exactly is a stock and why do people buy it?

Sorry for the noob question!

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Jim Ng

12 Nov 2018

Marketing Strategist at https://www.bestseo.sg

A stock is an ownership of a company that is being sold on the Public Stock Exchange.

People usually buy it because of 1 out of 2 reasons (or both):

1. Capital Gains

If the price of the stock the person bought goes up, the person could sell the ownership of the stock on the Stock Exchange and profit.

2. Dividend Yield

The stock issues dividends every quarter/half-yearly/ yearly depending on the stock. This generates a passive income for investors.

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