What are Stocks?

Definition of a Stock

Short and simple, a stock is an ownership of a firm or a company. A stock is a potion on the firm's assets and earnings. As you buy more stock, your ownership in the firm grows more and more. It doesn't matter if you call it, equity, shares, securities or stock, it all translates to the same thing.

Owning a stock

Owning a company's Stock actually means that you are one of the many owners (Shareholders) of a company, thus you have some claim (very small) to everything that the company owns. In simple terms you own a tiny piece of furniture, trademark and every contract of the company. Being an owner, you are entitled by law a share of the Company's earnings as well as any voting attached to the stock.

When you buy shares, you are given a stock certificate. Basically, its a nice peace of paper that's proof of your ownership. Well you will never get to see the certificate because your brokerage keeps the records electronically. The certificates are stored electronically so that it is easier to trade shares. In the past, people had to take the certificate physically to the brokerage. Now buying and selling shares with a click of the mouse and a phone call makes everything much easier.

That's all for this now Check out our next episode as we continue to explain how stocks work.
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Introduction to Nairobi Stock Exchange

Want to start investing in Stocks? Wouldn't you love to be a business owner without ever having to show up at work? Picture this your business or company is growing and you never get to leave the comfort of your Bed, Couch or leaving room. The money is rolling in, Well that picture might seem like a fairy tale but it's closer to reality than you might think.

Well you might be asking yourself how? Well we are talking about owning Stocks at the Nairobi Stock Exchange. In my opinion, this is the greatest method of building wealth out there. Stocks are a basic entity on every investment or business proposal.
Starting on this journey on financial freedom means that you need to be equipped with solid understanding of stocks and how they trade on the Stock Market.

Of late more and more people are being interested in the Stock Market. What was once a tool for the 'well off' is now being turned into a Vehicle for accumulating wealth. With the advance in technology and computer programs, nearly anybody can own stocks.

The problem is most people don't really understand Stocks.
Most people learn about stocks from conversations they have with friends during tea breaks at work or on the matatus on their way home in the evening.
I am very sure that you have heard people say things like" Brian's brother made a lot of cash with this and that company". Well to say the truth, most of these conversations are based on the get-rich quick mentality. Many people thing that stocks are the magic answer to instant wealth with no risk at all. The Key to success in the stock market is to always know where you are putting your money.

It is for these many reasons that we have created this blog.
We want to provide the foundation you need to make the right investment decisions yourself.

On our next post, we will start by explaining exactly what a stock is and the many types of stock, then I will try to explain how Stocks are Traded and what causes the price changes.

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