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Companies issue stock to raise money for many reasons like paying off debt or expanding their business. There are two main types of stocks: common stock and preferred stock. Common stock allows voting rights and dividends. Stocks can be categorized as growth stocks, income stocks or value stocks based on their characteristics. Stock prices can change, and there is no guarantee of positive returns. If a company goes bankrupt, common stockholders are the last to receive payment. Stock holdings should be managed based on an individual's investment goals and risk tolerance. Using a portfolio with a mix of stocks and bonds can help manage market changes and reduce overall risk.

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What are stocks?

Stocks are a type of security that gives stockholders a share of ownership in a company. Stocks also are called "equities."
Why do people buy stocks?
Why do companies issue stock?
What kinds of stock are there?
What are the benefits and risks of stocks?
How to buy and sell stocks
Understanding fees Common and preferred stocks may fall into one or more of the following categories:
Avoiding fraud
Additional information
Why do people buy stocks?

Investors buy stocks for various reasons. Here are some of them:

Capital appreciation, which occurs when a stock rises in price

Dividend payments, which come when the company distributes some of its earnings to stockholders

Ability to vote shares and influence the company

Why do companies issue stock?

Companies issue stock to get money for various things, which may include:

Paying off debt

Launching new products

Expanding into new markets or regions

Enlarging facilities or building new ones

What kinds of stocks are there?

There are two main kinds of stocks, common stock and preferred stock.

Common stock entitles owners to vote at shareholder meetings and receive dividends.

Preferred stockholders usually don't have voting rights but they receive dividend payments before common stockholders do, and have priority over common stockholders if the company goes bankrupt and its assets are liquidated.

Growth stocks have earnings growing at a faster rate than the market average. They rarely pay dividends and investors buy them in the hope of capital appreciation. A start-up technology company is likely to be a growth stock.

Income stocks pay dividends consistently. Investors buy them for the income they generate. An established utility company is likely to be an income stock.

Value stocks have a low price-to-earnings (PE) ratio, meaning they are cheaper to buy than stocks with a higher PE. Value stocks may be growth or income stocks, and their low PE ratio may reflect the fact that they have fallen out of favor with investors for some reason. People buy value stocks in the hope that the market has overreacted and that the stock's price will rebound.

Blue-chip stocks are shares in large, well-known companies with a solid history of growth. They generally pay dividends.

Another way to categorize stocks is by the size of the company, as shown in its market capitalization. There are large-cap, mid-cap, and small-cap stocks. Shares in very small companies are sometimes called "microcap" stocks. The very lowest priced stocks are known as "penny stocks." These companies may have little or no earnings. Penny stocks do not pay dividends and are highly speculative.

What are the benefits and risks of stocks?

Stocks offer investors the greatest potential for growth (capital appreciation) over the long haul. Investors willing to stick with stocks over long periods of time, say 15 years, generally have been rewarded with strong, positive returns.

But stock prices move down as well as up. There's no guarantee that the company whose stock you hold will grow and do well, so you can lose money you invest in stocks.

If a company goes bankrupt and its assets are liquidated, common stockholders are the last in line to share in the proceeds. The company's bondholders will be paid first, then holders of preferred stock. If you are a common stockholder, you get whatever is left, which may be nothing.

Even when companies aren't in danger of failing, their stock price may fluctuate up or down. Large company stocks as a group, for example, have lost money on average about one out of every three years. If you have to sell shares on a day when the stock price is below the price you paid for the shares, you will lose money on the sale.

Market fluctuations can be unnerving to some investors. A stock's price can be affected by factors inside the company, such as a faulty product, or by events the company has no control over, such as political or market events.

Stocks usually are one part of an investor's holdings. If you are young and saving for a long-term goal such as retirement, you may want to hold more stocks than bonds. Investors nearing or in retirement may want to hold more bonds than stocks.
Accounts, Opening a Brokerage Account
Brokerage Orders
Buying and Selling Stock: Market Centers
Holding Your Securities
Microcap Stock
Stock Splits
Reverse Stock Splits
Stocks Held in Street Name
Trade Execution: Rules Your Brokerage Firm Must Follow
Voting Rights-Exercise Your Voting Rights in Corporate Elections
Investor Bulletin: American Depositary Receipts
Investor Bulletin: After-Hours Trading
The risks of stock holdings can be offset in part by investing in a number of different stocks. Investing in other kinds of assets that are not stocks, such as bonds, is another way to offset some of the risks of owning stocks.

How to buy and sell stocks

You can buy and sell stocks through:

A direct stock plan

A dividend reinvestment plan

A discount or full-service broker

A stock fund

Direct stock plans. Some companies allow you to buy or sell their stock directly through them without using a broker. This saves on commissions, but you may have to pay other fees to the plan, including if you transfer shares to a broker to sell them. Some companies limit direct stock plans to employees of the company or existing shareholders. Some require minimum amounts for purchases or account levels.

Direct stock plans usually will not allow you to buy or sell shares at a specific market price or at a specific time. Instead, the company will buy or sell shares for the plan at set times - such as daily, weekly, or monthly - and at an average market price. Depending on the plan, you may be able to automate your purchases and have the cost deducted automatically from your savings account.

Dividend reinvestment plans. These plans allow you to buy more shares of a stock you already own by reinvesting dividend payments into the company. You must sign an agreement with the company to have this done. Check with the company or your brokerage firm to see if you will be charged for this service.

Discount or full-service broker. Brokers buy and sell shares for customers for a fee, known as a commission.

Stock funds are another way to buy stocks. These are a type of mutual fund that invests primarily in stocks. Depending on its investment objective and policies, a stock fund may concentrate on a particular type of stock, such as blue chips, large-cap value stocks, or mid-cap growth stocks. Stock funds are offered by investment companies and can be purchased directly from them or through a broker or adviser.

Understanding fees

Buying and selling stocks entails fees. A direct stock plan or a dividend reinvestment plan may charge you a fee for that service. Brokers who buy and sell stocks for you charge a commission. A discount brokerage charges lower commissions than what you would pay at a full-service brokerage. But generally you have to research and choose investments by yourself. A full-service brokerage costs more, but the higher commissions pay for investment advice based on that firm's research.

Avoiding fraud

Stocks in public companies are registered with the SEC and in most cases, public companies are required to file reports to the SEC quarterly and annually. Annual reports include financial statements that have been audited by an independent audit firm. Information on public companies can be found on the SEC's EDGAR system.

Additional information

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Stocks are a type of security that gives stockholders a share of ownership in a company. Stocks also are called "equities." Why do people buy stocks? Why do companies issue stock? What kinds of stock are there? What are the benefits and risks of stocks?

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Short-term investments are made for quick financial needs like a down payment or a party, typically lasting less than three years. On the other hand, long-term investments, like stocks, are needed for time periods of at least three to five years. While short-term investments offer safety, they usually have lower returns compared to long-term investments. One popular short-term investment is a high-yield savings account, ideal for risk-free investors who need access to their money quickly without risking loss. Overall, the decision between short and long-term investments depends on individual financial goals, the chance of risk, and time horizons. High-yield savings accounts provide a secure and low-risk option for people needing short-term guarantee while earning some interest on funds.

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In stock investagtioning, it promises high growth and high returns, typically from tech manufacturing companies. This requires time and high risk tolerance. Although, the companies investments need more looking into so after months of research an answer has been produced by ME. NVIDIA Corporation is the worldwide leader in visual computer technologies and the inventor of the graphic processing unit, or GPU. Over the years, NVIDIA's focus has evolved from PC graphics to artificial intelligence making a very strong company in the stock market. The BEST long term Investment in the overall years is in NVIDIA Corp. NVIDIA offers strong finance stability and has less incoming money for having barely any risk in dropping its growth. NVIDIA is a top Growth Stock according to almost all rank systems. It has a year- over- year earning growth of 116.2%. It has a Growth Style Stock Score of A and is a top pick for growth stock investors. It carries high income and a low risk of dropping. In conclusion, no matter what the interest is in; short term investments, long term investments, savings accounts, Funds, the best long term investment is no doubt in NVIDIA.

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The is the End and now you know about Stocks also please leave a 5 star review on the slides but now you can start clapping.

:D

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Invest/Investment- It is basically just making smart decisions and putting your money in a stock of a company to hopefully earn more money

Investors- Investors are people like YOU who want to make some money so are making smart investments after reading this presentation to earn money over time.

Shares of Stocks- Shares are individual parts of stocks or different companies that you invest in to earn money over time or maybe quicker.

Economics- Economics are the production of goods or cool stuff and services, It is the stability of a company and different guarantees.

Initial Public Offering (IPO)- IPO's are when the shares of a private company are available to the public like YOU to invest in.

Transaction- It is the action of buying or selling something like a non shady business deal.

Exchange Traded Funds (ETF)- It is just investments in stocks or bonds and investing in many assets at once.

Common Stock- A stock that is common and mainly for the public.

Preferred Stock- a class of shares that gives an investor a higher claim in a company than a common Stockholder, and having a right to claim income of a company.

Exchange Traded Notes (ETN)- It is a bond by a large bank or another financial institution and promises to pay holders the principal investments.

The End- It just means that the presentation is done and now you can clap so I can be happy.

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The stock market is a place where companies sell shares of stocks to investors. Stock markets let people buy and sell shares of stocks, allowing investors to make money from company success. Rising stock prices show confidence, while falling prices may show economic instability. Primary markets sell new stocks through IPOs (Initial Public Offering), while secondary markets involve daily trading among investors. Many people are indirectly invested in stocks through retirement, college, or health savings accounts. To actively invest in stocks, consider using specific stocks or ETFs (Exchange-Traded Funds), or mutual funds to make good decisions, maximize returns, and manage risks effectively.

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Source: Trading Hours.

Over-the-Counter Exchanges

There also exist several loosely regulated over-the-counter (OTC) exchanges, which may also be referred to as bulletin boards (OTCBB). These shares tend to be riskier since they list companies that fail to meet the more strict listing criteria of bigger exchanges. Larger exchanges may require that a company has been in operation for a certain amount of time before being listed and that it meets certain conditions regarding company value and profitability.

In most developed countries, stock exchanges are self-regulatory organizations (SROs), non-governmental organizations that have the power to create and enforce industry regulations and standards.

The priority for stock exchanges is to protect investors through the establishment of rules that promote ethics and equality. Examples of such SROs in the U.S. include individual stock exchanges, as well as the National Association of Securities Dealers (NASD) and the Financial Industry Regulatory Authority (FINRA).

Stock Market Indexes

Indices represent aggregated prices of several different stocks, and the movement of an index is the net effect of the movements of each component. Major stock market indexes include the Dow Jones Industrial Average (DJIA) and the S&P 500.

The DJIA is a price-weighted index of 30 large American corporations. Because of its weighting scheme and the fact that it only consists of 30 stocks (when there are many thousands to choose from), it is not a good indicator of how the stock market is doing. The S&P 500 is a market-cap-weighted index of the 500 largest companies in the U.S. and is a much more valid indicator.

Indices can be broad such as the Dow Jones or S&P 500, or they can be specific to a certain industry or market sector. Investors can trade indices indirectly via futures markets, or via exchange-traded funds (ETFs), which act just like stocks on stock exchanges.

A market index is a popular measure of stock market performance. Most market indices are market-cap weighted, which means that the weight of each index constituent is proportional to its market capitalization. Keep in mind, though, that a few of them are price-weighted, such as the DJIA. In addition to the DJIA, other widely watched indices in the U.S. and internationally include the:

S&P 500

Nasdaq Composite

Russell Indices ( Russell 1000, Russell 2000)

TSX Composite (Canada)

FTSE Index (UK)

Nikkei 225 (Japan)

Dax Index (Germany)

CAC 40 Index (France)

CSI 300 Index (China)

Sensex (India)

Why Companies Issue Shares

To make the transition from an idea germinating in an entrepreneur's brain to an operating company, they need to lease an office or factory, hire employees, buy equipment and raw materials, and put in place a sales and distribution network, among other things. These resources require significant amounts of capital, depending on the scale and scope of the business.

Raising Capital

Many corporate giants started as small private entities launched by visionary founders like Jack Ma of Alibaba ( BABA) or Mark Zuckerberg of Meta.

A startup can raise capital either by selling shares through equity financing or borrowing money through debt financing. Debt financing can be a problem for a startup because it may have few assets to pledge for a loan.

Equity financing is the preferred route for most startups that need capital. The entrepreneur may initially source funds from personal savings, as well as friends and family, to get the business off the ground. As the business expands and its capital requirements become more substantial, the entrepreneur may turn to angel investors and venture capital firms.

Listing Shares

Companies can access larger amounts of capital than they can get from ongoing operations or a traditional bank loan by selling shares to the public through an initial public offering (IPO).

This changes the status of the company from a private firm whose shares are held by a few shareholders to a publicly-traded company whose shares will be held by numerous members of the general public. The IPO also offers early investors in the company an opportunity to cash out part of their stake, often reaping very handsome rewards in the process.

Once the company's shares are listed on a stock exchange and trading on the market, the price of these shares fluctuates as investors and traders assess and reassess their intrinsic value. There are many different ratios and metrics that can be used to value stocks, of which the single-most popular measure is probably the price-to-earnings (PE) ratio. Stock analysis tends to fall into one of two camps- fundamental analysis, or technical analysis.

How Share Prices Are Set

The prices of shares on a stock market can be set in several ways. The most common way is through an auction process where buyers and sellers place bids and offer to buy or sell. A bid is a price at which somebody wishes to buy, and an offer, or ask, is the price at which somebody wishes to sell. When the bid and ask coincide, a trade is made.

Stock Market Supply and Demand

The stock market also offers a fascinating example of the laws of supply and demand at work in real time. For every stock transaction, there must be a buyer and a seller. Because of the immutable laws of supply and demand, if there are more buyers for a specific stock than there are sellers of it, the stock price will trend up. Conversely, if there are more sellers of the stock than buyers, the price will trend down.

The bid-ask or bid-offer spread, the difference between the bid price for a stock and its ask or offer price, represents the difference between the highest price that a buyer is willing to pay or bid for a stock and the lowest price at which a seller is offering the stock.

A trade transaction occurs either when a buyer accepts the asking price or a seller takes the bid price. If buyers outnumber sellers, they may be willing to raise their bids to acquire the stock. Sellers will, therefore, ask higher prices for it, ratcheting the price up. If sellers outnumber buyers, they may be willing to accept lower offers for the stock, while buyers will also lower their bids, effectively forcing the price down.

Matching Buyers to Sellers

Some stock markets rely on professional traders to maintain continuous bids and offers since a motivated buyer or seller may not find each other at any given moment. These are known as specialists or market makers.

A two-sided market consists of the bid and the offer, and the spread is the difference in price between the bid and the offer. The more narrow the price spread and the larger size of the bids and offers, the greater the liquidity of the stock. If there are many buyers and sellers at sequentially higher and lower prices, the market is said to have good depth.

The original manual method of trading was based on a system known as the open outcry system, where traders used verbal and hand signal communications to buy and sell large blocks of stocks in the trading pit or the exchange floor.

However, the open outcry system has been superseded by electronic trading systems at most exchanges. These systems can match buyers and sellers far more efficiently and rapidly, resulting in significant benefits such as lower trading costs and faster trade execution.

Advantages of Stock Exchange Listing

An exchange listing means ready liquidity for shares held by the company's shareholders.

It enables the company to raise additional funds by issuing more shares.

Having publicly tradable shares makes it easier to set up stock options plans that can attract talented employees.

Listed companies have greater visibility in the marketplace; analyst coverage and demand from institutional investors can drive up the share price.

Listed shares can be used as currency by the company to make acquisitions in which part or all of the consideration is paid in stock.

Disadvantages of Stock Exchange Listing

Significant costs associated with listing on an exchange, such as listing fees and higher costs associated with compliance and reporting.

Burdensome regulations may constrict a company's ability to do business.

The short-term focus of most investors forces companies to try and beat their quarterly earnings estimates than take a long-term approach to their corporate strategy.

Many giant startups choose to get listed on an exchange at a much later stage than startups from a decade or two ago.

While this delayed listing may partly be attributable to the drawbacks listed above, the main reason could be that well-managed startups with a compelling business proposition have access to unprecedented amounts of capital from sovereign wealth funds, private equity, and venture capitalists. Such access to seemingly unlimited amounts of capital would make an IPO and exchange listing much less of a pressing issue for a startup.

Investing in Stocks

Numerous studies have shown that, over long periods, stocks generate investment returns that are superior to those from every other asset class. Stock returns arise from capital gains and dividends.

A capital gain occurs when you sell a stock at a higher price than the price at which you purchased it. A dividend is the share of profit that a company distributes to its shareholders. Dividends are an important component of stock returns. They have contributed nearly one-third of total equity return since 1956, while capital gains have contributed two-thirds.

While the allure of buying a stock similar to one of the fabled FAANG quintet-Meta, Apple ( AAPL), Amazon ( AMZN), Netflix ( NFLX), and Google parent Alphabet ( GOOGL)-at a very early stage is one of the more tantalizing prospects of stock investing, in reality, such home runs are few and far between.

Investment often depends on an individual's tolerance for risk. Risky investors may generate most of their returns from capital gains rather than dividends. On the other hand, investors who are conservative and require income from their portfolios may opt for stocks that have a long history of paying substantial dividends.

Market Cap and Sector

While stocks can be classified in several ways, two of the most common are by market capitalization and by sector. Market cap refers to the total market value of a company's outstanding shares and is calculated by multiplying these shares by the current market price of one share.

Large-cap companies are generally regarded as those with a market capitalization of $10 billion or more, while mid-cap companies are those with a market capitalization of between $2 billion and $10 billion, and small-cap companies fall between $250 million and $2 billion.

The industry standard for stock classification by sector is the Global Industry Classification Standard (GICS), which was developed by MSCI and S&P Dow Jones Indices in 1999 as an efficient tool to capture the breadth, depth, and evolution of industry sectors. GICS is a four-tiered industry classification system that consists of 11 sectors and 24 industry groups. The 11 sectors are:

Energy

Materials

Industrials

Consumer Discretionary

Consumer Staples

Health Care

Financials

Information Technology

Communication Services

Utilities

Real Estate

This sector classification makes it easy for investors to tailor their portfolios according to their risk tolerance and investment preference. Conservative investors with income needs may weigh their portfolios toward sectors whose constituent stocks have better price stability and offer attractive dividends through so-called defensive sectors such as consumer staples, health care, and utilities. Aggressive investors may prefer more volatile sectors such as information technology, financials, and energy.

How Does Inflation Affect the Stock Market?

How Much Does the Stock Market Grow Every Year?

How Do People Lose Money in the Stock Market?

The Bottom Line

Stock markets represent the heartbeat of the market, and experts often use stock prices as a barometer of economic health. But the importance of stock markets goes beyond mere speculation. By allowing companies to sell their shares to thousands or millions of retail investors, stock markets also represent an important source of capital for public companies.

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Learn how the stock market works, why companies issue stock, what happens when you buy a stock, and what happens when you sell a stock.

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Buyers and sellers trade stocks on exchanges, which can be physical or electronic. A stock exchange is a marketplace where stocks are bought and sold, along with other investments like ETFs and ETNs (Exchange-Traded Funds & Exchange Traded Notes). Exchanges can have physical locations, like the NYSE (New York Stock Exchange), or be completely electronic, like the Nasdaq Stock Market. Different countries have their own exchanges, such as the Tokyo Stock Exchange. Stocks can be listed on one or multiple exchanges. Companies must also report financial information and have certain board members. If a company can't meet the requirements, it will be delisted. Stock Exchanges make money through revenues from transaction fees and market makers.

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What are stock exchanges and how do they work? | Vanguard

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Learn how stock exchanges such as the New York Stock Exchange connect buyers and sellers.