What is a stock?
A stock is a share of the ownership of a company. A stock represents a claim on a portion of the company's assests and earnings. Stocks, shares, or equity, they all mean the same thing.
Owning Stocks
Holding onto stocks means that you are one of the many owners, or shareholders of a company. You have a small claim to the company's assets. All of their assets, even including the cushions of the couches in their building. In reality this piece of ownership is very small. You are entitled to the company's profits, and have the right to vote within the company as well.
A stock certificate represents your ownership of the stock. This proof is not usually printed in today's electronic age. Your broker keeps an electronic copy on your behalf. This makes it easier to trade shares. If you were buying and selling shares every few days, or even multiple times a day, that would involve alot of stock certificates. In the past, you needed to physically take the certificate down to your brokers. Nowadays, trading is alot easier, with electronic copies of all your stock certificates stored on your broker’s server.
Although being a shareholder means you can have a claim on the company’s assets, it does not mean you have a say in the company’s day to day business. The extent of your power can be expressed at one vote per share at the annual board of directors meetings. Although theoretically shareholders can vote against the management of the company, this is not usually the case. The management of the company are responsible for the running of the company, and you as a shareholder collect dividends every 6 months.
From an investment perspective, this arrangement is great. You don’t have to work for your money. The company’s board of directors have to do all the leg work. You just own the shares, and sit back to watch the profits flow in through the dividends. The more shares you own, the larger your dividends will be. Your claim on assets is only relevant if a company goes bankrupt. In case of liquidation, you'll receive what's left after all the creditors have been paid.
Another benefit of owning stocks is that you are not liable for any of the company’s debts. The most you can lose is the value of your investment. If the company goes bankrupt, you can never lose your personal assets.
In summary, owning stocks does seem to be a win-win scenario. You have a claim on the profits of the company, and can get rewarded through its dividends, without being responsible for the company’s day to day running, or its debts.