Understanding Stocks and Bonds
The stock market is a platform where companies raise capital by issuing shares to the public. These shares represent ownership in that company, and investors buy them with the expectation of selling them at a higher price later.
Types of Stocks
- Common stocks: Represent ownership in publicly traded companies. Examples include Apple (AAPL) and Microsoft (MSFT)
Bonds and Interest Rates
Bonds are debt securities issued by companies or governments. When you buy a bond, you lend money to the issuer at a fixed interest rate in exchange for regular principal payments.
