What they are
■ Stock symbolize possession of a corporation. Stockholders possess a share of the company and are permitted to a share of the profits as well as a vote in how the company is run.
How earnings are made
■ Company profits may be divided among shareholders in the form of dividends. Dividends are typically paid quarterly.
■Larger profits can be made through an augment in the value of the stock on the open market.
■If the market value goes up, the gain can be substantial. You could buy a stock at $20 per share and in months or days it could go up to $40 per share which means you made a $20 profit.
■Money is easily accessible.
■ If market value goes down, the loss can be substantial.
■ Choosing and managing stock often necessitates study and the help of a good brokerage firm.