Basic Definitions Regarding Investments

man-notes-macbook-computerBuying stocks is when you acquire part ownership within a company. As a stockholder, this may allow you to vote for the Board of Directors of the company. You also will have the right to get information regarding the activities of the firm. In some cases, stockholders can also share in the profits received by the company, which are referred to as dividends.

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Stocks are bought and held by investors for long periods of time because the longer the stock is held, the hope is that the stock price will go up, and this will result in more money for those who have invested.

Of course, there is no way to know for sure if a stock will go up or down, so there is always a risk. You can help avoid this risk by doing a lot of research on a particular stock before buying. You should only buy into stocks that will stand the test of time, and avoid the ones that are fads.

When you buy stocks, you can go through a broker. This person is a type of middleman that you hire to handle the buying and selling of your stocks.

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