Stocks and shares
You have decided to invest your savings in stocks. You talk about your plan with others but you get different opinions: 'No, don't do it now, it's too risky, the markets are falling.' 'Great moment to do it, the stock market is rising!'
Who can you believe? How can you be sure it is a good investment?
First, you can never be sure: buying stocks is risky, but you can expect the reward (that is, the money you can make) to be higher than the risk.
Historically, over several years, on average, buying stocks is a good investment. That means you should not buy stocks for a few months; if you do, you have a higher probability of losing money. Stocks fluctuate, which means their price keeps changing.
Stocks are part of a company's capital, that is, its money. Not all stocks are traded on the stock market. Only 'listed' companies have their stocks sold and bought on the stock markets.
First, stock prices vary according to the company's performance, especially its profit growth, either in the past, or what investors expect in the future.
Then, stocks keep changing because of economic factors (are consumers buying more, for example?) and investors' anticipations.
