B. Stocks
Stocks, also known as equities, are essentially certificates of ownership in a company. When you buy stock, you’re buying a share of that company, and with it comes a claim on its profits and a vote in its future. The price of the stock fluctuates based on the company’s performance and investor sentiment. Understanding stocks is a stepping stone to investing in the stock market.
Shares
When the total capital of the company is divided into units of small denominations, it is known as shares. For example, if the total capital of the company is ₹ 5,00,000, divided into 10,000 units of ₹50 each, each unit of ₹50 will be called a share (of ₹ 10 each). Thus, in the above case, the company has 1,00,000 shares of ₹10 each. In order to identify the shares, they must be numbered.
Types of Shares
Investing
Investing is the key to building wealth and long-term financial stability. Studies show that historically, investing in stocks and other assets outperforms the rate of inflation, helping your money grow over time. As Warren Buffett advises, “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
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