This is one of the most confusing aspects of investing. You hear one person say they invest in stocks. Another says they own shares. And now you’re wondering, are these just two ways to say the same thing, or is there a difference I should actually know?
The answer is yes, there’s a difference.
But don’t worry, it’s not the kind of difference that requires a dictionary or a finance degree.
In this blog post I will explain the differences between shares and stocks so you can understand it better.
What Are Stocks?
Stocks mean you own a part of a company. Ownership in a company. But it doesn’t tell you how much. It’s a broad, general way of saying, “I have a stake in this business.”
It’s like saying, “I own land.” But how much land? Where is it located? What kind of land? You’re giving us the idea of ownership, but not the details.
So, “stock” is more of a category or concept. It tells us you’re invested, but not in what quantity or where specifically.
What Are Shares?
Shares are the actual units that make up stock. When you say, “I own 50 shares in Dangote Cement,” you’re not just talking about a general idea of ownership; you’re giving us real numbers and pointing to a specific company.
Think of it like this: if owning “stock” is like saying you bought cake, then owning “shares” is like saying you bought two slices of red velvet cake. Now we know what kind and how much.
What’s the Difference Between Shares and Stocks?
Stock is the general idea of ownership in a company or several companies. It’s not specific. Shares, on the other hand, are precise. They tell you how much you own and in which company.
So when someone says, “I own stock,” they’re giving you the headline.
But when they say, “I own 120 shares in MTN,” now they’re giving you the whole story.
You might be wondering if both terms basically mean ownership, is it such a big deal?
Yes and no.
In everyday conversations, people often use “stock” and “shares” interchangeably. And that’s not a problem.
But once you start diving deeper into your investments, especially when using apps like Trove, it becomes useful to understand the difference. You’ll see clearer reports, understand your portfolio better, and communicate your money moves with more confidence. The difference lies in the detail.
Conclusion
At the end of the day, both stocks and shares represent ownership in a company, but they are not exactly the same thing.
Stocks speak in broad terms, whereas shares give you the specifics.
It’s the difference between saying you play football and saying you scored two goals in last Saturday’s match.
So next time you hear someone say, “I own stocks” or “I own shares,” you are able to understand what it means and the difference between stock and shares.
