Saturday School — What Does It Mean to Buy a Company’s Stock?

Buying stock can seem like a mysterious process to new investors. This video breaks down the process so you'll have the confidence to invest.

Saturday School — What Does It Mean to Buy a Company’s Stock? Photo by robert cicchetti / Shutterstock.com

If you’re new to investing, the concept of stocks can seem a little scary. What exactly are they? And what are the risks — and rewards — of purchasing them?

In a nutshell, when you buy a share of stock, you become part owner of a company. That means you have a financial stake in the ups and downs of the business.

But there is so much more to know before you invest. Watch this Khan Academy video, and you’ll learn about many aspects of investing, including:

  • How stocks differ from bonds
  • The definition of assets and liabilities
  • How concepts such as book value can indicate whether a stock is worth buying

For more investing advice, check out:

Do you have any tips for beginning investors? Share them by commenting below or on our Facebook page.

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