Stocks and Shares
A share is a part ownership of a company, and shares can rise or fall in price, offering profit but also risk.
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A share is a part ownership of a company, and shares can rise or fall in price, offering profit but also risk.
- Dividends are payments to shareholders
- Stock markets trade shares
- Spread risk with different investments
🧠 Quick quiz
Three questions. Score 2 or more to complete the topic.
What is Stocks and Shares?
Within Economics & Civics, which covers money, markets, business, government, law and citizenship: how societies are organised and run, this topic explains Stocks and Shares. Economics and civics topics explain how money, markets, laws and government affect people, so each topic here pairs a clear definition with a model.
Check that you can explain Stocks and Shares in your own words and give one example from everyday life. If you can do that, you have understood the core idea.
Understanding Stocks and Shares helps you read the news critically and weigh up policies, choices and arguments about society.
Stocks and Shares in detail
A share is a unit of ownership in a company. Buying shares makes you a part-owner, or shareholder, who may receive dividends (a share of profits) and can gain if the share price rises, or lose if it falls. Companies issue shares to raise money for growth, and they are traded on stock exchanges such as the London Stock Exchange.
Prices change with supply and demand, company performance, the economy and news. Investing in shares offers higher potential returns than savings, but also greater risk, so diversification (spreading investments) helps reduce risk. Other investments include bonds and funds. Never invest money you cannot afford to lose, and beware of scams.
How the interactive helps you understand Stocks and Shares
Watch the growth curve in the interactive. Use any sliders or buttons it offers to change the values and see how the growth curve responds.
Before you change anything, predict the result. Then change one value at a time and check whether your prediction was right. This is a quick way to build a correct mental model of Stocks and Shares.
Real-life uses and examples
- Explain Stocks and Shares to a classmate using a choice you make yourself, such as spending pocket money.
- Give a balanced answer about Stocks and Shares by considering more than one point of view.
- Relate Stocks and Shares to a news story about prices, jobs, elections or government spending.
Common mistakes to avoid
- Giving an opinion without evidence or a clear economic or civic reason.
- Confusing a short-term effect with a long-term one.
- Learning the definition without testing it. Use the quiz and the interactive to check that you can apply the idea.
Frequently asked questions about Stocks and Shares
What is Stocks and Shares?
A share is a part ownership of a company, and shares can rise or fall in price, offering profit but also risk.
What are the most important points about Stocks and Shares?
The main points are: Dividends are payments to shareholders; Stock markets trade shares; Spread risk with different investments.
Why is Stocks and Shares useful?
Understanding Stocks and Shares helps you read the news critically and weigh up policies, choices and arguments about society.
How can I practise Stocks and Shares?
Open the interactive at the top of this page and change the controls one at a time. Predict the result before each change, then take the three-question quiz. A score of two or more marks the topic as complete on this device.
Which topics are related to Stocks and Shares?
Related topics in Economics & Civics include Population and the Economy, Economic Indicators, Government Intervention in Markets.