What is a stock, exactly? A company sells stocks as a way to raise capital to grow its business. Stock can be purchased through a stockbroker or brokerage service. When you buy stock, you effectively own a portion of that business. The value of a stock is based on market selling prices on any given day.

As a stockholder, you may be entitled to receive dividends as a return on your investment. Dividends are cash payments made by a company to its stockholders. And they are paid out if the company makes a profit.

Over the long term, stocks have historically outpaced inflation of other investments. But over the short term, stocks can be very risky. If you're searching for a potentially steadier way to invest your money, perhaps it's better to choose another investment product - such as a mutual fund. Or, you could diversify your portfolio with stocks as well as other investment products.