Investing
Stocks & Equities
Learn what owning a stock means, how investors may earn returns, and why stock prices can fluctuate.
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Stocks in 30 seconds
A stock represents an ownership interest, or share, in a company. Owning shares does not guarantee profits, price gains, or dividends.
Two pathways
How investors may make money
Capital appreciation
A shareholder may realize a gain by selling shares above their purchase price. Prices can also decline, creating a loss.
Dividends
Some companies distribute money to shareholders. Dividends may be reduced, suspended, eliminated, or never paid.
Many influences
Why stock prices move
Prices can respond to company results and expectations, economic conditions, interest rates, industry developments, investor sentiment, and company-specific news. Short-term movements can have multiple causes and cannot be explained or predicted precisely.
Hypothetical illustration
Stock prices can be volatile
Significant short-term changes are a normal feature of equity markets, but losses can also be permanent. Markets and individual companies do not always recover.
Company size
What is market capitalization?
Market capitalization is the total market value of a company’s outstanding shares. It is commonly used to describe company size, but size alone does not determine whether a stock is suitable or what return it will produce.
Spread exposure
Concentration risk
One company
Many holdings
Owning only one or a few stocks can make results depend heavily on those companies. Diversification can spread exposure, but cannot eliminate loss.
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Sources & last reviewed
Official references
- Last reviewed
- August 2026
- Primary sources
- Ontario Securities Commission and Canadian Securities Administrators