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Stocks and shares explained

What are stocks and shares, how are they priced and can you time the market? 

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What are stocks and shares?

Stocks and shares are familiar terms and are often interchangeable.

In fact, the ‘stock’ of a company is all of the shares into which ownership of a company is divided but, in the U.S., investors say they own ‘stock’ rather than ‘shares’.

Whatever term you use, and equities is another often in use, investors buy shares with the expectation that over time, the value of the shares will rise.

Companies issue shares as a way of raising money so they can fund and plan for growth. Shares are bought and sold electronically on a stock exchange, and many countries will have their own exchange.

The UK has the London Stock Exchange (LSE) and with EQi, investors can find and buy shares in companies listed here but also shares from companies listed on other major exchanges such as the New York Stock Exchange (NYSE).

Popular articles

  • How is the price of shares determined?

    The price of shares should reflect the performance of a company and expectations of how it will grow and sustain its profitability.

    As it is not possible to know what the future holds for any corporation, investors take a rational view on what market factors are at play but sentiment undoubtedly has a part to play in share price too.

    If investors believe a company will perform well, its shares attract buyers and push prices up. If a company falters, its investors lose confidence and look to sell in greater numbers, and so its share price will fall.

  • Think time in the market, not timing the market

    ‘Time in the market, not timing the market’ is an old adage and is based on hard-won investing wisdom. No investor can judge the right moment to buy or sell every time.

    Plus, it may seem counter-intuitive but volatility can provide opportunities. Some of the best days in markets often come immediately after significant falls as investors can pick up shares at a good price.

    Investing regularly and over the longer-term usually produces positive results and you can read more about strategies for investing over time in our insight section.

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