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Every day, billions of stocks are traded on the New York Stock Exchange alone. But with over 43,000 companies listed on stock exchanges around the world, how do investors decide which stocks to buy? To answer this question, its important to first understand what stocks are, and what individuals and institutions hope to achieve by investing in them. Stocks are partial shares of ownership in a company. So by buying a stock, investors buy a share in the companys success or failure as measured by the companys profits. A stocks price is determined by the number of buyers and sellers trading it; if there are more buyers than sellers, the price will increase, and vice versa. The market price of a share therefore represents what buyers and sellers believe the stock, and by association the company, is worth. So the price can change dramatically based on whether investors think the company has a high potential for increasing profitability even if it isnt profitable yet. Inves