🌱What is a stock? An explanation for complete beginners
What is a stock?
A stock represents ownership in a company. When you buy one Apple share (AAPL), you own a (tiny) piece of that company.
How do stocks make money?
Two main ways:
- Price appreciation — as the company grows and earnings increase, others are willing to pay more for shares. Buy AAPL at $150, sell at $200 → $50 profit per share.
- Dividends — some companies pay part of profits directly to shareholders. Coca-Cola (KO) pays ~3% annually.
How to start?
- Open a brokerage — Interactive Brokers, Trading 212, Schwab, Fidelity
- Deposit funds
- Buy your first share — start with a broad ETF (VWCE / VOO) before individual stocks
- Hold long-term — minimum 3-year horizon
How much money do you need?
Start with as little as $50. Most brokers support fractional shares — buy 0.1 of a Berkshire Hathaway share for $40 instead of the full one for $400.
What matters
- Diversification — never put all your eggs in one basket
- Long-term horizon — short-term moves are noise, long-term trends are positive
- Discipline — don't panic-sell during routine -20% drawdowns (every 3-5 years)
Where to find this in QMA
- /screener — browse 9,000+ US stocks with quality filters
- /qma-picks — 3 monthly high-conviction picks with entry/SL/target
- /portfolio-health — free portfolio analysis
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Create a free accountContent created by AI in collaboration with Jaroslav Vojtášek. Not investment advice. The author may hold the stocks mentioned. Investing involves risk of loss.
Operator: Jaroslav Vojtášek, Company ID (IČO) 48783447.