What it means to own a stock
As you probably already know, when you own a stock you are a shareholder of the company, and this means that you own a tiny piece of every single thing the company owns. Yes, that means you own a tiny sliver of every patent, every dollar, and every contract that the company has. As an owner, you have the right to a piece of the companies earnings, as well as you may have voting rights when the company makes significant decisions. The shares you own in a stock is represented by a stock certificate. However, with advancing technology, you don't get to see or keep this paper as it is electronically kept by your brokerage. This is to ensure that trading can be done more efficiently, as in the past you would have to take your certificate down to your brokerage to sell shares, whereas now, all you need to do to sell your shares is click a few buttons on a computer.
Despite all the rights you have as a shareholder, there are also some restrictions that you have. For example, you don't have a say in the day-to-day running of the company, meaning if you own shares in Apple, you can't just call up Tim Cook and give him advice. Also, just because you own shares in let's say McDonalds, it doesn't mean that you will be able to just walk into your local McDonalds and pick up a free burger. For most people, these restrictions are okay, as your main goal when owning a stock is attempting to make money. Despite common belief, stock price going up or down, isn't the only way you make or lose money in your investment. As a shareholder, you are like earlier mentioned, entitled to a portion of the company's profits and assets. The larger position you have in a company, the bigger piece of the earnings you have. These profits are sometimes paid through dividends. Unlike profits, your claim on assets is only valid if the company you own goes bankrupt. In the situation where your company may liquidate (terminate the business), you'll receive what's left over after the creditors have been paid.
Despite all the rights you have as a shareholder, there are also some restrictions that you have. For example, you don't have a say in the day-to-day running of the company, meaning if you own shares in Apple, you can't just call up Tim Cook and give him advice. Also, just because you own shares in let's say McDonalds, it doesn't mean that you will be able to just walk into your local McDonalds and pick up a free burger. For most people, these restrictions are okay, as your main goal when owning a stock is attempting to make money. Despite common belief, stock price going up or down, isn't the only way you make or lose money in your investment. As a shareholder, you are like earlier mentioned, entitled to a portion of the company's profits and assets. The larger position you have in a company, the bigger piece of the earnings you have. These profits are sometimes paid through dividends. Unlike profits, your claim on assets is only valid if the company you own goes bankrupt. In the situation where your company may liquidate (terminate the business), you'll receive what's left over after the creditors have been paid.