Stocks, company shares or equities are one of the most basic tools that investors use to grow their savings and reach long-term financial goals. Though stocks don’t come without risk, they can be an important way to diversify a savings plan and mitigate the impact of market ups and downs.

The term “stock” can mean several things, but it’s most often used to refer to the share in ownership of a publicly traded company. When a company goes public, it sells stock to the general public, which allows them to raise money and expand their operations. This also opens the door to regulatory oversight by the Securities and Exchange Commission, which may require companies to disclose more about their finances and business operations than they might otherwise be required to do.

Investors who buy stock in a company gain an ownership stake in that company, which can earn them profit if the company does well financially and the value of their shares increases over time. This can help them build wealth and prepare for retirement, education expenses or other financial goals. As with buying stocks, selling them comes with a degree of risk. If a company does poorly, the stock can lose value and become worthless.

There are many ways to invest in stocks, from individual shares in a large company to mutual funds and exchange-traded funds that invest in a broad range of companies and sectors. Some of these investments are more volatile than others, but all have the potential to yield a solid return on investment.

Some people choose to hold their stocks for the long term, and this strategy can be an excellent tool for growing a savings account and meeting financial goals. It’s important to consider the risk associated with any type of investment, however, and always work with a trusted financial advisor before investing any money.

When it’s time to sell, there are a few different options for how and when to do so. The best option will depend on an investor’s personal situation, their investing timeline and their tolerance for loss. It’s important to make decisions with an eye toward long-term growth and not let emotions drive short-term trading, as this can be expensive.

There are three types of sell orders available to investors, including market orders, limit orders and stop-limit orders. A market order will execute at the current market price, which could be higher or lower than the purchase price. Limit and stop-limit orders allow an investor to set a maximum and minimum price for their sale, which can be helpful in protecting against losses. A stop-limit order will only execute if the market price reaches a predetermined level, such as a specific price or an area of the chart. There are a variety of different order types, but most investors can get by with just these three.