What a stock is
A stock, also called a share, is a small piece of ownership in a company. If the company grows and earns more, the value of your piece can grow too. If it struggles, it can fall. Some companies also pay dividends, which are slices of their profit paid to shareholders.
Stocks vs. bonds
A bond is a loan you make to a government or company. In return, they promise to pay you interest and pay back the loan later. Bonds usually move up and down less than stocks. If the borrower runs into money trouble, it might not pay you back in full.
Prices go up and down
Stocks tend to swing more in the short run. Over many decades they have historically earned more than bonds or cash, but past results do not guarantee future ones.
Diversification
Diversification means spreading money across many investments so one bad company can’t sink everything. When markets drop, long-term investors often hold on, because selling in a panic turns a temporary drop into a real loss.