Bangalore: Stocks is a very frequent word which we always hear from our financial advisor, but very few people understand all about stocks. Joshua Kennon from About.com reported about – must know facts about stocks. These facts will help you understand stocks better and will put you years ahead of any average investor.

What Exactly is Stock?

Companies and firms sell their stocks to investors to raise cash for their expansion. By this way company makes profit by expanding their business and investors make profit by owning a part of this expanded business.

What Is the Difference Between a Stock and a Bond?

A bond is a sum of money loaned to a company in exchange for interest which is usually paid twice per year, whereas a stock is a piece of ownership in a company. When a bond ‘matures’ the borrower company has to pay the money back to the investor.

What Are Blue Chip Stocks?

A stock which an investor believes is much safer to invest than others and has good growth, a strong balance sheet and which will pay back a good dividend is known as a blue chip stock.