What are stocks or shares?

In layman term – stock/share/equity represent ownership in a company.

If I own a stock in a company, I am one of the owners as I am investing some money in the company. The more I buy stocks, the more is my ownership. I then own a part of the assets or properties and the profits of the company.

But, owning a TATA share does not mean I can go to TATA office and pick up a chair for my home just because I seem to like the colour and design of the chair!

It’s a different kind of ownership; if the company flops and goes bankrupt, then after paying out all the debt, I can get a part of the money from the sale of the assets.

But there are risks too. We have discussed about the risks in Risks of Shares.