Basics4 min read
What is a share?
A share is a slice of ownership in a company. Own one, and you own a tiny piece of the business.
A share, sometimes called a stock or equity, is a unit of ownership in a company. If a company has issued 100 shares and you own one, you own 1% of that business, including a claim on 1% of its profits and assets.
Why do companies issue shares?
To raise money. Rather than borrow, a company can sell ownership to the public and use the cash to grow. In return, investors get a stake in the company's future.
How do you make money?
Two ways: the share price rises and you sell for more than you paid (capital gains), or the company shares its profits with you directly (dividends). Neither is guaranteed. Share prices can fall as easily as they rise.
Frequently asked
- Is a share the same as a stock?
- In everyday use, yes. 'Stock' usually refers to ownership in general, while 'share' refers to a specific unit of it.
- How many shares should I buy?
- There is no right number. It depends on your goals, risk appetite and budget. MarketByte does not give investment advice.