Hey White Tee Way readers! Let’s do some learning today! I know a good chunk of readers may already know about stocks, but it’s important for me to spread knowledge and create content that will help any person at any level. If you’ve been buying and selling stocks for years a post like this may not be for you. However, it never hurts to brush up on some learning content! Today we’ll dig into what stocks are, how we can but them, why people buy stocks and some tips to make well informed decisions.

Let’s dive in!

What Are Stocks?

By definition, stocks are a type of security that gives stockholders a share of ownership in a company.

Companies like Apple, Nike, GameStop, Starbucks may come to mind when you think about stocks. These companies are all public companies in which their company stock is available to be bought and sold by everyday people such as you and I! 

If you buy shares of Apple Inc., are now a shareholder and have ownership of Apple Inc.! Now don’t think because you bought a little bit of Apple Inc., you call all the shots at Apple Inc. While you are a “shareholder” of Apple Inc., you are only limited to voting rights during shareholder meetings. You do not have any authority to make day to day decisions regarding the company.

How To Buy Stock

Unfortunately, you can’t just go into any store or website and say I want some Apple stock and pay with a credit card or cash.

You need to apply and get approved for open an online brokerage account before even thinking about buying stocks. Companies like Fidelity, Charles Schwab and Robinhood have made buying stock as easy as ever.

A brokerage account is a type of an investment account that is used to buy financial securities. 

Once you’ve applied, gotten approved and funded your brokerage account you are ready to buy some stocks! 

My preferred broker is Fidelity, click this link to sign up here! Their platform is easy to use for investors and every level, offer fractional share investing so you can buy stocks with as little as $1 and you can have multiple accounts opened under one login.

What’s the biggest reason people buy stocks?

To make money! 

When you are buying stocks, you are buying with the intention that the price of the stock will increase over time. Thus for you as the investor, you are looking to make a profit. 

For example, if you bought shares of Apple at $150 per share on January 1st and by December 31st the stock price of Apple is sitting at $200 per share, you so far have made $50 per share of Apple stock. 

Stock	January 1st Stock Price	December 31st Stock Price	Total Gain
Apple Inc.	$150.00 per share	$200.00 per share	$50.00 per share

But wait!

Keep this in mind: stocks you are either making or losing money on are not considered “real” until you sell the stock.

When you sell stock for a profit or loss, those are called “realized gains or losses”. When you are making or losing money on a stock you haven’t sold yet, those are called “unrealized gains or losses”.

So going back to the Apple example, you would have an unrealized gain of $50 per share of Apple stock since you haven’t sold your shares yet.

*Warning about stocks and every type of investment you make*

Investing in stocks can be risky! You can lose 100% of your investment without doing proper due diligence before investing.

One piece of advice I can give you:

If you don’t understand what you’re buying, don’t buy it.

The reason I say this is because if you are completely unaware of what you’re investing in, you could be walking into a trap where you’ll lose money. I know that from experience because I used to just buy stocks without any prior research and hope for the best. The second you treat the stock market like a casino, you’ve already lost.

Do your research. Do your due diligence. Make well informed decisions.

It’s important for you to know that there are risks involved with buying stocks. Nonetheless as long as you make well informed decisions and invest often, you can make money in the stock market. Just remember, all good things take time. I hope this post gave you and better understanding of stocks and I hope you look to open an investment account in the near future!