Stock is a way to invest in companies that produce goods and services. Public companies sell shares of stock on a market exchange (like the New York Stock Exchange and Nasdaq) to raise money to fund their businesses. Investors buy those shares if they think the company will prosper in the future, and can make money on their investment as the price of the stock rises or they receive dividend payments. Shareholders also may have voting rights at shareholder meetings.

A company’s value increases when its sales and profits grow. Stock prices on a given day can be affected by many factors, including supply and demand. But over the long term, stocks have typically outperformed other asset classes such as bonds, real estate and cash, according to the U.S. Securities and Exchange Commission.

When people say they are buying stock, they are purchasing a fractional ownership stake in a publicly-traded company. This ownership gives you certain rights, depending on the type of stock you own. For example, common stock shareholders get one vote per share in a company’s decision-making process. Other types of stock, such as preferred shares and restricted shares, confer different ownership privileges.

To trade stock, you need a brokerage account. A broker is a person or computer program that can place orders on your behalf and record transactions in your account. You enter a company’s ticker symbol or name into your broker’s website or app, and the broker either buys or sells the number of shares you request. Then the broker records the transaction in your account, and sends a confirmation to you.

You can choose to invest in stocks through a variety of financial institutions, including discount online brokers, full-service brokers, banks, mutual funds and some insurance companies. If you want to work with a professional, look for a registered investment broker. They can handle market trades for their clients and provide valuable advice and guidance.

While there’s no guarantee of returns on investments, a well-diversified portfolio of stocks can help you achieve your retirement goals or other financial objectives. To build a well-rounded portfolio, include stocks from a wide range of industries and geographic locations.

Learn more about how to buy and sell stock by exploring the links below. Then, check out our top investment brokers rated by the NerdWallet editorial team on their accounts fees and minimums, investment choices, customer support and mobile app capabilities.

You can find the latest stock information by visiting a company’s Securities and Exchange Commission filings or by calculating financial ratios such as earnings per share. However, remember that a single year of revenue or profit doesn’t tell you much about the long-term health of a company. For a more complete picture, consider the company’s strategic direction, competition and market trends. Also keep in mind that a stock’s price can be affected by a host of other factors, both positive and negative. This includes macroeconomic trends, industry and investor sentiment and news coverage.