Simply put, stocks are ownership shares in a corporation. Buying a stock in a corporation means you become one of its owners. As owner, you benefit from its profits in the form of dividends or value increases and suffer the consequences when price falls. This is because a stock has no absolute value, being dependent on the performances of the corporation and other market forces.
Past performances of stocks cannot serve as guarantee for future profits. There is no such thing as guaranteed profits in stocks investment. The possibility of earning is as real as the possibility of losing, just like in any other business transactions. It is all about calculated risks and reasonable rewards.
