Function

• Each share of stock represents part-ownership in a particular company. Stockholders benefit by sharing in the company's earnings without having to get involved with day-to-day operations.
  
  

Features

• Because stock prices fluctuate according to demand, it is possible to get in on the ground floor of a growing company and realize substantial profits by selling the stock when the price rises.
  
  

Benefits

• While not guaranteed, many companies share profits with investors through the payment of dividends--payments of cash or additional stock in proportion to the number of shares you own.
  
  

Considerations

• Although they are owners of the company, the liability of stockholders is limited. If the company goes bankrupt, shareholders' loss is limited to the amount of their investment. Their other assets are not at risk.
  
  

Warning

• Stock investing comes with great risk as well as great reward. If you are new to investing, you may want to consult with a financial adviser before investing in any company.