You have to understand stocks before you understand the stock market and stock investing. Basically, a stock represents the smallest share of company ownership. Companies issues stocks in order to get some additional capital and attract new investors that by buying stocks are actually buying a part of the company. This partial ownership, gives the shareholders some rights to a say in how the company is managed and how to share the profits if there are any. What's more, while stocks give owners some influence on how the company is run, they do not carry any obligation in case the company defaults, faces a lawsuit or declares bankruptcy. The worst thing that can happen is the stock becoming worthless.