a real business. By owning shares - the most amazing wealth-creation vehicle ever conceived you are a part owner of a business. Shareholders "own" a part of the assets of the company and part of the stream of cash those assets generate. As the company acquires more assets and the stream of cash it generates gets larger, the value of the business increases. This increase in the value of the business is what drives up the value of the shares in that business. Different Classes of Shares:Occasionally, companies find it necessary for various reasons to concentrate the voting power of a company into a specific class of shares where the majority is owned by a certain set of people. For instance, if a family business needs to raise money by selling equity, sometimes they will create a second class of stock that they control that has ten votes per share of stock and sell a class of stock that only has one vote per share to others. However for investors this is less attractive and they avoid companies where there are multiple classes of voting stock. This kind of structure is most common in media companies and has been around only since 1987. Mutual Funds:Mutual funds are a way for investors to pool their money to buy shares, bonds, or anything else the fund manager decides is worthwhile. Instead of managing your money yourself, with a mutual fund you turn over the responsibility of managing that money to a "professional." Unfortunately, 9 of 10 "professionals" tend to underperform the market indexes. Stock Derivatives - Options and Futures: Arguably the most volatile and risky investments possible, options and futures are "derivative" securities, meaning their value is "derived" from that of another security or commodity. Options and futures are both very volatile because they often carry an incredible amount of leverage. For instance, each options contract on an individual stock controls 100 shares of that stock for a fraction...
