A company needs a variety of real assets, such as offices and computers for instance. To pay for these, the company needs money. It can borrow the money or it can issue securities like bonds and stocks. Investors can buy these securities, so providing the company with the money it needs. The offering of securities is said to take place in the so-called primary market.

In the case an investor buys a stock, he in fact owns a tiny bit of the company, or in other words holds a share of the company. This shareholder has the right to vote in the general shareholders meeting and is entitled to a part of the profits the company makes, called dividend. Although the stock that the shareholder owns is actually representing a part of the company, the shareholder cannot be held personally responsible for the company's debts.

Stocks are investments that are tradable. The trading of stocks takes places on the so-called secondary market.