Stocks

Stocks, also known as Shares or Equities are instruments which grant the holder a stake in a company or corporation. Ownership of Shares usually entitles a stockholder to voting rights regarding corporate decisions and also to receive Dividends on profits (if the management awards them).

The majority of Shares available to private investors are publicly quoted (or listed) and available for trading on a stock Exchange. Most countries have a stock Exchange for domestic firms and (especially in the case of larger exchanges) multi-national firms who were originally established elsewhere may decide to list on an Exchange which is located in another country with a larger or more established financial services sector.

A key principle of stock ownership is that the holder's liability is limited to the amount they paid to acquire their Shares. Stockholders are generally ranked the lowest in order of preference should a company be wound up which usually means they receive little or nothing if a company ceases to trade.