Definition
A share of ownership in a company; its price rises and falls with the company's prospects and the market.
What it means
When you buy stock, you own a small part of a company. Stockholders can earn money if the share price goes up or if the company pays dividends, and they can lose some or all of their money if the price falls or the company fails. Stocks of public companies trade on exchanges through brokerage accounts, and prices change throughout the trading day. Over long periods, stocks have historically returned more than bonds or cash, but with much bigger ups and downs, and past performance does not guarantee future results. Many people own stocks indirectly through mutual funds, exchange-traded funds or retirement plans. Profits from selling are capital gains. The SEC's Investor.gov explains how stocks work and how to check a broker's background.
Example
Buying 10 shares at $50 costs $500. If the price rises to $60, the shares are worth $600, a $100 gain; if it falls to $35, they are worth $350, a $150 loss.
Illustrative numbers only. Your situation will differ.