Stocks — also known as shares, equity or equities — are an important part of many investors’ plans to build wealth. But despite their importance, stocks aren’t always easy to understand. Whether you’re a new investor or an old pro, it’s important to get the basics down.

A stock is a share in a public company whose products or services you like. Companies that are successful often increase in value, and when you own shares of a company you can sell them for a profit or use the money to invest in other companies.

Most publicly traded companies are listed on a stock exchange, where investors looking to buy or sell can match up with each other almost instantly. The price of a stock rises or falls as people’s views about the future of a company change, for example when potential bad news makes some investors think that a company could be headed for trouble.

Other factors can affect the price of a stock, including how much people are already invested in it and what the overall economy and markets are doing. But over the long term, a company’s performance is the main determinant of its stock price.

Some businesses offer their shares to the general public, while others only allow their employees or other investors to own their stock. Some private companies may be so small that they don’t even have a stock market, and if they do, it might be very niche and not well-known.

To buy a stock, you need to open a brokerage account. There are lots of different options for brokerage accounts, including online brokers, traditional investment advisors and robo-advisors. NerdWallet’s ratings of online brokers and robo-advisors look at more than 15 factors, including account fees and minimums, investment choices, customer support and mobile app capabilities.

When you want to buy a specific stock, you type its ticker symbol into your broker’s website or app and tell it how many shares you’d like to purchase. Some companies have special symbols for their shares, while others use the letters A-Z. You can also find a stock’s current share price on your brokerage’s website or app by searching for it.

When you’re ready to buy, your broker will tell you how many shares are available at the price you’ve chosen. Then you’ll buy them, and your brokerage will record the transaction for your account. You can also sell your shares at any time, but you’ll probably lose some of your investment if you do so at a bad time, for example when the stock market is falling. That’s why stocks are usually considered long-term investments, with the hope that they will rise over years or decades, giving you a higher total return than cash alternatives like savings accounts and certificates of deposit. But if you’re worried about the risk, you can limit your exposure to the stock market by investing in more conservative assets like bonds and real estate investment trusts.