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What are Stocks?

Perhaps some of the most famous stocks that you will have come across are those like Facebook, Apple and Google Stock. In essence stocks, also known as equity or shares are a type of financial security or asset which represents ownership in a corporation. It also represents a stake in the claim for the corporation’s assets and its earnings. By issuing stocks to the public, a company can raise capital that it might need to fulfill its contractual obligations or to help finance its long term growth objectives. Normally, the issue of these stocks is done through IPO or Initial Public Offering which then lets the stocks be traded on the stock exchange. For the last few hundred years, this is one of ways which companies raise much needed capital hence making the stock market the most mature of all financial markets.

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