What is a stock and why do people buy them?
Slice of the Dream
What is a stock and why do people buy them?
Imagine you and three friends want to open a lemonade stand, but you need money for lemons, sugar, a table, and a big pitcher. None of you has enough cash alone. So you make a deal: each person puts in $25, and in return, each owns one-quarter of the stand. Congratulations — you've just created stock.
A stock is a slice of ownership in a company. When a business needs money to grow — to build factories, hire people, create new products — it can sell stocks to the public. Each stock is one tiny piece of the whole company. Buy a stock, and you're not a customer anymore. You're a part-owner.
