First of all what is a stock? A stock is a share or a part in the ownership of the company. It is a claim on the assets and earnings of a company. When a person buys more shares, his ownership in the company gets increased. The words shares, stocks and equity are used interchangeably.
Holding a company’s stock mean that the person is one out of many stake holders and he can claim anything that goes in a company. The stock is represented by a stock certificate. This piece of paper certifies your ownership in the company. These days people are using demat accounts for buying and selling of shares.
The company also pays a decided amount to its share holders from time to time as a part of the earnings. This is known as dividend. The small investors do not have much say in the company’s day to day business. If there is an institution or big firm who holds a substantial percentage of shares of a company they can influence the decision of the company.
The share holders can use the dividends either for their use or they can reinvest the dividend amount to buy more shared. There are schemes available where the option of automatic reinvest in the shares is available.
In order to trade successfully in the stock market the traders can take the help of advisory firms which provide accurate stock market tips. These advisory firms have expert technical analysts who on the basis of their in depth research provide support to their clients. They generate various buy and sell calls to trade effectively in the market.
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