Stock

Meaning :

A stock is defined as a share representing ownership in a company. When an individual buys a stock, they acquire a small portion of that business, and they can earn

returns through price appreciation or dividends paid by the company.

Example : 

For instance, purchasing 10 shares of Reliance Industries grants you partial  ownership in the company and its profits.

How to Understand : 

Think of a stock as a slice of a company that you possess.

If the company grows and performs effectively, the value of your stock will rise.

Conversely, if the company underperforms, the value of your stock may decline.

Importance :

Stocks are instrumental in building long-term wealth and financial security.

They generally offer higher returns compared to savings accounts, making them attractive investment options.

Owning stocks provides you with a stake in various companies, influencing their growth.

Stocks facilitate capital growth, supporting your overall financial goals.

Additionally, investors may earn dividends, providing supplementary income from their investments.