I've had some questions regarding stocks that have been bothering me for a while. They are naive, but that is the whole point: to understand what they are and fix my misconceptions.
- What is a stock?
I don't mean what it represents, but what is it. Is it a physical certificate you can show your family and friends? Is it a number in some database corresponding to your credentials? If you have 1000 google stocks, do you have 1000 pieces of paper? Is there a certificate with "1000 google stocks" on it?
- Where do I get a stock?
Do I need to go somewhere to buy a stock? Do I need to register an account on some website and hope it's legit, give it a whole bunch of personal details? If you buy a stock online, can you get a physical version of it?
I mean, I know for example, http://www.rbcdirectinvesting.com/services/onlineinvesting/account-open-or.html offers a service to buy stocks from, but $10 to just buy or sell a stock seems strange. Aren't there stocks that cost under $10? Wouldn't this discourage people from getting into trading stocks? Is this the intention? $20 just to buy and sell a single stock is really expensive for single buy-sell test to develop an idea of how/whether it works.
- Can anyone buy/own/use a stock?
Are there limitations to who can buy a stock? What if you give them away to somebody who can't, can they use it?
- How are stocks taxed?
I read that stocks are taxed, but I don't understand how it can be taxed if you don't give away information to how much you bought it for. Are you obligated to give the government information regarding my investing patterns? Also, what if you hold a stock for a really long time, and no longer remember what you bought it for exactly.
I know i'm asking a lot but it's been bothering me for a while and I appreciate any explanations given. I know much of this can be explained through Google but I am having difficulty understanding, as I have no idea what a broker is, there are too many places that claim to sell stocks, that I