What is a share?

A share (also called a stock or, in Brazil, an ação) is a small unit of ownership in a company. Buy one share and you legally own a tiny slice of that business — its factories, its brand, its future profits and its risks.

Owning part of a business

Companies are divided into a fixed number of shares. If a company has issued 1 million shares and you hold 1,000 of them, you own one tenth of one percent (0.1%) of the entire company. That ownership is real, even if it is small.

Being a shareholder typically gives you:

• A claim on profits, usually paid out as dividends.
• Voting rights on big decisions (depending on the share type — more on that soon).
• The right to sell your shares to someone else at the going market price.

Why share prices move

A share's price is simply what the next buyer is willing to pay and the next seller is willing to accept. That number rises and falls with the company's results, the wider economy, interest rates and plain human sentiment. Over the long run a share tends to track how well the underlying business does; over the short run it can swing on news and mood.

The key mindset

The single most useful idea for a beginner is this: a share is a piece of a real company, not just a ticker symbol on a screen. Everything else in this track builds on that simple truth.