Stocks of a corporation are equity stakes of its owners, representing the residual assets of the company that would be due to stockholders after discharge of all senior claims such as secured and unsecured debt.
The stock market lets investors participate in the financial achievements of the companies whose shares they hold.
If companies are profitable, stock market investors make money through the dividends the companies pay out and by selling appreciated stocks at a profit called a capital gain. At the same time, investors can lose money if the companies whose stocks they hold lose money, the stocks' prices goes down and the investor sells the stocks at a loss.
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