A share of stock is a piece of ownership in a company. How big a piece depends on how many shares of stock there are. Companies that offer stock for sale to the public are know as publicly-held companies.

There are different types of stock. Common stock is what people normally think of when they hear the word ‘stock.’ It is by far the most widely available kind of ownership. Preferred stock has certain protections against a company’s financial troubles, but tends to grow more slowly in value. A corporation may also have classes of stock with different dividend policies, purposes, or restrictions.

Many stocks pay dividends, based on the profits of the company. These will generally fluctuate from year to year. The most stable dividends are paid by blue chip companies like GE. Stocks with stable, high dividends are called income stocks. These are generally older, established companies and utilities. Young, growing companies or ones in high-tech fields may not pay any dividends at all. Instead, they will put earnings back into the company to make it grow faster. These stocks are called growth or aggressive growth stocks.

In order to make investment decisions, you need to either spend a lot of time doing research, or find an investment representative you have faith in.

Whether you pick the stock or your investment representative helps you, you will need to execute the trade (buy the shares). The amount that is charged to buy a stock is called a commission. Commissions can vary greatly from broker to broker. It's a good idea to compare commission structures between brokers before deciding which one to use.

If the main part of your portfolio is going to be in individual stocks, make sure you are sufficiently diversified. If you don’t have a lot of money to invest, stock mutual funds may be able to give you more diversification at a lower cost.