Companies and corporations raise capital through the issue of shares that entitle share holder to ownership interest, or equity, in the company. Those shares are called stocks and each one represents a small percentage of ownership in a company. When you own a stock, you are referred to as a shareholder or stockholder.

The benefit of holding stocks in a company is that when the corporation profits, so do its stockholders. Over time, stocks in general have been useful investments. Specifically, as the economy has grown, so have corporate earnings and stock prices. As a result the individual investor has seen dividends increase along with their ability to sell shares of stock at prices higher than they were originally purchased.