Stocks, shares and equities are all words used to describe what is essentially the same thing.
When you buy a share, you are buying ownership of part of a company and you become a shareholder in that company. You are investing your money in that company by buying an equity stake. The value of your share can change and, as an investor, your objective is to sell your share for a higher price than you paid for it.
Shares in companies are commonly bought and sold on a financial market, such as a stock exchange. Some companies’ shares are traded on more than one, such as the London or New York stock exchanges. Every company with shares that are traded on an exchange has a unique identifier, called an Epic code, which is typically an abbreviation of the company’s name.
You can monitor the performance of your shares, and their historic performance and dividend history, by tracking the relevant Epic codes.
You can also use stock market indices to monitor the performance of the equities market. The FTSE 100 or Dow Jones Industrial Average are the main market indices for the London and New York stock exchanges, respectively. An index can provide you with useful trend information; so if the FTSE 100 is rising, it is an indication that the value of shares traded on the London Stock Exchange may also rise.
The company whose share you have bought may decide to offer more shares to a stock market. When a company first decides to sell its shares on a financial market, it is known as an Initial Public Offering (IPO), or ‘flotation’. As well as issuing more shares, a company may also decide to split its shares, or take other corporate actions that may affect the value of your shares.