What is a share?
Stocks are nothing more than shares in a stock corporation. Anyone who acquires such a security automatically becomes a co-owner of the company in question. The value of a share, called the share price, is determined on the stock exchange on the basis of supply and demand.
Why do shares exist?
For companies, issuing shares is a form of financing. When a company wants to increase its capital, it issues shares to create additional equity. In return for the capital received, the buyers of the shares, the shareholders, are entitled to a share in the profits (dividends) of the company. Since the shareholders are co-owners of the company, they can attend general meetings and participate in decisions.
Shares as an investment
For most of us, shares are simply an investment opportunity. Investors buy shares in a company in the hope of being able to sell them at a later date at a profit. In general, however, shares are considered a rather risky investment. It is difficult to predict how the price of a share will develop, as it depends on a large number of factors. As with all investments, however, the higher the risk, the better the return.
