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June 07 , 2012

The central idea of shares is ownership. You own your house, but a company is often larger, so a group of people own it collectively. Similar to the house title, a set of certificates are printed for a company and distributed among the owners. Based on these certificates, you can exactly own a certain proportion of the company. This is your share in the company.

Ownership obviously means taking part in the profits and losses of the company. It also means taking part in the decision making process (yourself or through a Board of Directors).

A stock is an asset class, since this ownership is a store of value. If you own a part of a good company, that is obviously valuable. People will be willing to pay you to get that value transferred to their name

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