Stocks

What Are Stocks?

Stocks are like tiny pieces of ownership in a company. When you buy a stock, you're actually buying a small slice of that business!

Real-World Example 🍕

Imagine a pizza shop called "Tony's Pizza":

• Tony wants to expand but needs $100,000
• He divides ownership into 10,000 "shares" worth $10 each
• You buy 10 shares for $100
• Congratulations! You now own 0.1% of Tony's Pizza

How It Works (Step by Step)

1. Companies "go public": They offer ownership pieces (stocks) to regular people
2. You buy shares: Through an app like Robinhood or a broker
3. You become a part-owner: Even if it's a tiny percentage
4. The value changes: Based on how well the company performs and what other people think it's worth
5. You can make money two ways:
   • The stock price increases (you can sell for profit)
   • The company pays dividends (sharing profits with owners)

Why It's Like Social Media

Think of stocks like TikTok videos:

• Popular companies (like viral videos) see their stock prices rise as more people want them
• Unpopular companies see prices fall when people "unfollow" by selling
• Trends can change quickly, sometimes based on emotions rather than facts

Why People Buy Stocks

• To grow their money (historically stocks grow about 7-10% per year on average)
• To build wealth over time (compound growth)
• To own pieces of companies they believe in
• To earn passive income through dividends

Remember: Stocks can go up AND down—there's always risk involved, but that's why there's potential for reward!