When you own stocks, a few common terms come up that sound complex but are actually straightforward. Here’s what they really mean — without jargon.
Dividends
Dividends are cash payments a company shares with its owners.
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You own stock → you may get paid
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Usually come from profits
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Not guaranteed, but common with mature companies
Stock Splits
A stock split increases the number of shares, not the value.
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1 share at $200 → 2 shares at $100
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Your total value stays the same
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Makes shares easier to buy and trade
Dilution
Dilution happens when a company creates more shares.
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Your ownership percentage becomes slightly smaller
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Often used to raise money or pay employees
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Can be good or bad, depending on how the money is used
What matters most is why the company does it and whether it improves long-term value.