Investing in stocks is an excellent way to build a nest egg for retirement. Of course, the number one rule to employ with stock investments is patience, because while you can quickly spend money on the stock market, it will take a bit more time to see a healthy return from that spending. A 401-k plan, for example, can take several years to turn $100 into $1000 - and there will most likely be some losses along the way.
One thing to keep in mind is that you can choose from a combination of high-risk and low-risk stocks in order to make it more likely that you'll gain instead of lose. However, gains from low-risk stocks tend to be slow, while gains from high-risk stocks, when they do happen, tend to be much more significant.
If you're new to stock investing, you may want to familiarize yourself with the whole process by reading up on stock market investment tips. Stocks are considered to be an equity investment, because when you purchase stocks from a company, you are purchasing partial ownership of that company, which means that so long as you own that stock, you will be entitled to some of that company's revenue.
How much, of course, depends on the type of stock you've purchased, and the company you've purchased it from. When purchasing stocks from a company, you'll also need to decide between common stocks and preferred stocks.
Common stocks will offer you voting rights on a company, but does not guarantee dividend payments. However, with a preferred stock, dividend payments are guaranteed - but there are no voting rights. Your goal as an investor -- ownership or making money -- will help you determine which type of stock is in your best interest.
In years past, shareholders -- that's the official name for investors who purchase stocks from companies -- would have actual paper certificates that attested to their stock ownership. These days, those documents, which are often called securities, are generally digital in nature, though you can certainly request copies of them if you would like to have them for your own records.