1 share costs $50 and 1 stock costs $100
Shares in saleable stock: $1m/$50= total shares is 20000
Number of shares bought/total shares=10/20k= 0.0005
I own 0.05% of 1 stock.
Bottom line, stocks and shares are the same thing. The minor distinction between stocks and shares is usually overlooked, and it has more to do with syntax than financial or legal accuracy.
Hope I made it clear
Here is what it means to own stock:
Whoever owns the shares of stock, owns the company, no one else. When you buy a share of stock, you are one of the owners of that company. It could be any of over 13,000 companies that have stock such as McDonald’s, Coca-Cola, Amazon.com, Ford, Krogers, your local bakery or electric company.
As a company earns money, it becomes more valuable and this value is reflected in the price of its shares on the open market. You collect this increase in value when you sell your shares for more than you paid for them.
The company’s board of directors decides what to do with its net earnings.
?Some or all of the earnings may be re-invested in the company so it can grow, open new stores or make repairs. When this is done, the earnings money is used up but the company is more valuable by that same amount.
The per share price, having increased because of the earnings, retain that increase when the earnings are re-invested in the company.
?Some or all of the earnings may be given directly to the shareholders as dividends. They just mail you a check or send the money to your brokerage account. This makes the price of the stock decrease by the same amount as the dividend, so you have the same value in the total of stock and dividends.
Since you are an owner of the company, the members of the board of directors work for you. Each year there is an election and you can vote for the board positions, one vote for each share that you own.
If you don't think the present board members are running your company properly, vote them out. You can inform the board of your ideas, concerns or recommendations and these carry the weight of your shares.
You are also protected when you own stock. For instance, if your company gets sued and loses more than it can pay, the law cannot come to you the owner, and confiscate your house or other property. The shares may become worthless, but that is all you can lose.
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If you buy stock hoping that you can sell it for a quick profit because of the daily or monthly swings in price, then you are gambling rather than investing. You are trying to guess better than the public, including professionals, how the price will change.
To invest, choose a company that has steady earnings each year instead of losses. If your company has very little long term debt, it will likely not get into financial trouble.
Buy quality stocks and hold on to them. When you hold these over a period of time, the per share prices will go up for a real reason - the companies are earning money every year and becoming more valuable. This is not gambling; you are owner of a money making business.
If you save a portion of your income each payday and invest in stocks, over the course of several years you can grow very wealthy indeed. It is like hiring someone to get a job and earn money for you, and then using that money to hire more workers. Your money grows exponentially.
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Imagine that a company is like a big pie... they slice off pieces and call them shares in the stock. When you buy a slice or two... you buy shares in those stocks.
