If you’re looking for a place to invest your savings, you may want to consider stocks. These are one of the core tools people use to grow their savings for long-term financial goals like retirement and education. Stocks have a history of providing strong returns, on average, over time. But, it’s also important to remember that stock prices can go down as well. That’s why investors often build a diversified portfolio of stocks by buying shares in companies large and small across a range of industries to help mitigate risk.

A share of stock is a fractional ownership stake in the ownership of a company. The value of your share is determined by the market, and may be influenced by factors including investor sentiment, the economy, the performance of other companies in your sector and global events. Your ownership stake gives you a claim on the company’s assets and earnings, and gives you voting rights in shareholder meetings.

Public companies issue shares of their stock in order to raise funds and allow investors to purchase a portion of the company. The company will then list these shares on a public exchange, such as the New York Stock Exchange or Nasdaq. Once listed, these shares are traded on the stock market and their price fluctuates based on the demand of buyers and sellers.

As a company grows its revenue and profits, it will likely make more money per share of stock. Over the longer term, this can lead to a rise in the stock price, known as capital appreciation. Many companies also pay a small percentage of their profits to shareholders each year, known as dividends.

A stock is a good place to park your savings, because historically, it’s been one of the best places to get the highest returns on your investments over time. But, it’s not without risk, and you could lose money if you don’t manage your portfolio with care. Stocks are notorious for their volatility, and a sudden downturn can wipe out your gains. That’s why it’s important to assess your risk tolerance before diving into the market.

There are different types of stocks, based on the size of the company and its ownership structure. The biggest companies are known as blue-chip stocks, while the smallest are called microcaps. You can further break down the market into industry segments and geographic regions.

Stocks offer the potential to grow in tandem with the economy, which can help you meet your financial goals. Talk with an Edward Jones advisor to learn more about what stocks can do for you, and how they fit into your long-term investment plan.