In the vibrant world of investing, the term 'stocks' or 'shares' frequently comes up. But what exactly does it mean to own a stock, and what's the difference between common and preferred stocks? This beginner's guide simplifies these critical concepts, setting you on the path to investment understanding. What is a Share or Stock? At its most basic, a stock or share represents ownership in a company. When you buy a share, you become a part-owner or shareholder of the corporation, giving you the right to a portion of the company's assets and earnings. Common Stocks vs Preferred Stocks: Breaking Down the Basics Companies often issue two types of stocks - common and preferred. Each comes with its unique characteristics, rights, and benefits. Common Stocks: When people refer to stocks, they usually mean common stocks. Owners of these shares generally have voting rights in the company and may receive dividends - a portion of the company's earnings. However, th...