Investing in stocks is an opportunity to grow your wealth over time while helping other companies and the economy as a whole. While it takes time to become a knowledgeable stock investor, technology has made it much easier to get involved. Stocks are the ownership shares in a publicly traded company and represent partial ownership of that business. Stocks are sold during an initial public offering (IPO) and are then traded on the secondary market – known as the stock market – where they can rise and fall in value based on a wide variety of factors.

When you start a new business, you raise money from friends and family to buy the ingredients (e.g. flour, icing, cupcake tins) and other assets you need to launch. In exchange for their investment, they give you shares in the business and a stake in any profits the company makes. Stocks work similarly at a larger scale and are traded on the main stock exchanges – such as the NYSE and Nasdaq – where buyers and sellers can find each other.

The value of a stock is the current estimate of how much the company is worth at a given point in time, determined by market supply and demand. There are a lot of factors that go into valuing a company, but revenue growth and earnings are the most common indicators that analysts look at.

In addition to these quantitative indicators, investors should also consider a company’s qualitative strengths and weaknesses. For example, a strong brand name can help build customer loyalty, and a defensible economic moat will make it harder for competitors to enter the market or take customers away from a firm.

Keeping your inventory at the right level is important to ensure that customers receive their orders in a timely manner. Too much inventory can eat into a company’s profitability, while too little can result in a lack of products to sell. Inactive stock, or dead stock, is the amount of inventory that has been unused for an extended period and can contribute to a “stock graveyard” where valuable space is taken up by unsellable product that doesn’t need to be in the warehouse.

The best way to learn about individual stocks is through research from professional sources. Many brokerage firms, especially full-service brokers, provide their own research reports and analyses on a variety of stocks. In addition, there are a number of independent research providers who specialize in providing analysis on a broad range of stocks. Some of this research is free, while some is provided for a fee. Finally, there are a number of consensus reports that bring together the opinions of a group of different analysts. All of this information can be accessed on the internet through financial websites. The FINRA website provides a free source of detailed stock market data and valuation information for the majority of U.S. listed companies. If you are interested in learning more about individual stocks, you can also sign up for a broker account with a provider like Robinhood.