When you buy stock, here’s what you actually own

Still, the main way people benefit from stocks is by buying and holding them for the long term. Investing legend Warren Buffett recommends holding stocks for decades. The patient investor will be rewarded, he tells CNBC: “The money is made in investments by investing, and by owning good companies for long periods of time. If they buy good companies, buy them over time, they’re going to do fine 10, 20, 30 years from now.”

Before you consider diving into the stock market, “you definitely want to take account of your personal financial situation,” says Grealish. “That includes assessing any debt you have and making sure you’ve paid down any high-interest debt. … The second thing is to make sure that your budget is such that you’re having extra money at the end of each week or each month.”

And, he adds, “make sure you have a cash emergency fund as well.”

Here’s some more information on stock market basics and what beginner investors need to know.

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