Stock, also known as bone broth or bouillon, is the base for many savory cooking dishes, including soups, stews and sauces. It is typically made by simmering animal bones and other ingredients for a long time, often with aromatics such as mirepoix. The resulting liquid is usually rich in collagen, which is converted to gelatin during the cooking process. It can also be enriched with protein, such as from meat or fish, or vegetable fiber, such as from carrot peels or celery cores and leaves.

Stock is an ownership stake in a company, and it’s traded on public markets such as the New York or Nasdaq exchanges. When a company decides to offer its stock to the public for the first time, it’s called an initial public offering (IPO). The price of a stock is determined by supply and demand, as well as factors such as how the company makes money, its history, future prospects and the macroeconomic environment.

Generally, stocks come with certain rights that make it beneficial for shareholders to own them. For example, shareholders typically have priority over bondholders in the event of a bankruptcy. They also have a right to a portion of the company’s earnings through dividends, which are regular payments to investors from company profits. Stock prices can also go up if the company is deemed more valuable than when it was founded, which might be the result of growing revenue or profit or higher demand for its products.

A stock’s market price can be different from its intrinsic value, which is determined by a number of factors including supply and demand, investor sentiment and speculation. The latter can be especially dangerous, as it can cause investors to bid up or down the price of a share even when a company’s financial performance or outlook hasn’t changed.

To invest wisely in stocks, you should diversify your portfolio, which should include equities from a variety of industries, companies and geographies. That way, if one sector experiences a downturn or slowdown, you won’t be fully exposed to it. When choosing individual stocks, you should take the time to research each company and consider its fundamentals, including its profitability, business model, talent pool, and reputation. You should also keep an eye on the macroeconomic environment, as it can affect how much risk you’re willing to take and what types of returns you expect. The best gains typically come from a stock’s first two pullbacks to its 10-week or 50-day moving averages. Then, you can take advantage of these opportune times to get in on a bargain.