A stock represents a certificate of ownership in a specific portion of a company.

Simply put, if you buy 100 shares of a company that has issued 10,000 shares, you become the owner of 1% of the company through that purchase.

In other words, you have control over the portion of the company that you own. If other people interested in purchasing your portion of the company want to own a part of it, they must offer you a buyback price, and it is up to you to assess whether that price is acceptable or if it is not favorable for you to sell at that time.

When a company progresses, performs well in the market, introduces new products, invests in advertising, and gains popularity, interested parties raise the price of individual shares, thus increasing the value of the company itself.

If people do not like any of the aforementioned factors or have other reasons, they lower the stock price, causing it to decrease. Fundamental values of a company, especially annual reports, have a significant impact on the stock price over the long term. The stock’s performance greatly depends on the time period in which it is purchased, the state of the country in which it operates, changes in ownership of the company, and so on.

If you are interested in purchasing a particular stock, consider its fundamental aspects and also examine its technical analysis before making a decision (we will discuss technical analysis (TA) in one of the following sections). Do not buy stocks based on news and rumors because usually, by the time a piece of information reaches the news, it is already too late. The information in the news is delayed by one or two days, and if your neighbor knows that you should buy shares of a certain company, that stock has long passed its peak, and you may easily end up buying it when it starts to plummet or skyrocket, depending on your position. Do not be confused by the term “position” because with the financial instrument of stocks, you can be in both directions and benefit from it. This is commonly referred to as “long” or “short.” “Long” means that you have bought the stock hoping its price will rise so that you can sell it and make a profit, while “short” means that you have sold something you “don’t own,” i.e., borrowed shares (depending on the broker) and exited the position when the price of that stock falls to the desired or predicted level.

Which stocks should you buy? There are many good stocks available, both in the domestic and foreign markets. You need to choose the stocks that are within your purchasing power or that your broker considers good for trading.