Stocks are tiny pieces of a company. Imagine if your favorite pizza place sold 100 slices ( stocks) of its business, buying one slice means you own 1% of that pizza shop. Stocks let you own a tiny part of a company. If the company does well, your slice becomes more valuable, meaning you’ll make more money from your investment.
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People use stocks to generate future profits at a faster rate than traditional savings accounts.
The ownership of popular companies such as Apple and Nike and Roblox could be a motivation for stock purchases.
How Do Stocks Work?
Here are few simple steps on how stock works
1. Investors should purchase stocks at low prices and sell them at high prices.
For instance, when you buy one stock of Netflix for $300 and you sell it at $400, it has given you a profit of $100.
2. Business popularity escalates stock prices: In 2020, when TikTok became popular, its stock value rose higher and investors made a lot of profit.
3. Dividends: It's when companies pay you cash just for owning their stock. It's like a bonus.
How to Invest in Stocks in 2025 (For Beginners)
Step 1: Open a Brokerage Account
- Use apps like Robinhood, ETRADE , or Fidelity . Many apps let you start with just $5. So, you don't need to be rich before investing in stocks.
Step 2: Pick Stocks You Understand
- Invest in companies you use daily like
Social Media (Snapchat, Meta (Facebook/Instagram). Also, you can invest in tech like Apple and Microsoft
Step 3: Don’t Panic!
- Stock prices go up and down daily. So, you need to hold for years, not days and don't panic at all.
2025 Investing Trends (Easy to Try!)
Here are the investing trends for stock in 2025
1. AI Stocks: Investing in companies like ChatGPT etc.
2. Green Energy : Investing in solar/wind
companies that add fighting climate change.
3. Fractional Shares : Buying a piece of expensive stocks like Amazon for $10 instead of $2,000.
NB: Remember to do your research before investing.