TPE Kids: What’s a Stock?

Think about the stores you’ve been in — toy stores, candy stores or clothing stores. Stores are a type of business. All businesses have owners.

Some businesses are owned by just one person.

But other businesses are owned by many people.

So how do lots of people own one business? They do it by owning stock.

Just like you can divide a pizza into slices, businesses are divided into shares of stock. A “share” is the smallest piece of a business you can own. The cost of a share depends on the company. Stocks are bought and sold on the stock market.

So, owning stock in a company is like owning a slice — or a little part — of a business.

Many companies you’ve heard of have stock, like Disney, Nintendo and Google.

You have to be a grownup to buy stocks. People buy stock when they think the company will be successful, and they sell stock if they think the company will not do well in the future.

Unlike money in a bank, stocks can be worth more or less over time. Deciding what stocks to buy is a very important decision that adults make — it’s called investing.

Your parents might own stock in companies. And someday, when you get older you may own stocks too. But you can still save money, even without owning stocks. You can put your money in a piggy bank or in a bank account that your parents set up for you.

Learning to save and invest is very important. Talk to your parents to learn more about saving and stocks.