Definition
A share of ownership in a company. Individual stocks can go to zero; the diversified alternative is owning thousands at once through an index fund.
Why it matters
Stocks are where long-term returns live, and single stocks are where concentration risk lives. The distinction between owning the market and betting on a company is the core investing decision.
Example
An investor holds a total-market fund for their retirement and keeps a small 5% play-money account for individual stock picks. A zero in the play account stings; a zero in any one of the fund's thousands of holdings is invisible.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.