A stock is a share in the ownership of a company. As a shareholder, you are entitled to a proportion of the company’s profits and have a claim on its assets commensurate with the number of shares you own.
Shares of different company stocks are traded at a stock exchange. where investments are priced in real-time through active bidding between buyers and sellers. The largest and most prestigious exchange in the world is the New York Stock Exchange or NYSE. Established more than 200 years ago by 24 New York City stockbrokers and merchants, the NYSE has grown to become the trading center for shares in some of the world’s most prestigious businesses including General Electric, Citigroup, Coca-Cola, and Wal-Mart.
Despite its dominance, the NYSE still only accounts for a fraction of total worldwide investment. Other major exchanges include the Nasdaq, which is home to many tech stocks, while many more are located across the globe in high-profile locations such as London and Hong Kong as well as smaller cities and emerging markets.
There are many benefits to owning stocks. They are easy to trade, deliver quick returns and come with no storage costs or logistical overheads. Furthermore, when you invest in a company’s stock your liability is limited. The maximum value you can lose is the value of your investment, so even if a company of which you are a shareholder goes bankrupt, you can never lose your personal assets.