Basics of the Stock Market
What is a stock?
A stock is a share of ownership in a company.
What is long-term investing?
Buying and holding stocks for many years to grow wealth over time.
What is the S&P 500?
An index that tracks 500 large companies in the U.S. to show overall market performance.
What is an IPO
When a company first sells its shares to the public.
what is market volatility
The degree to which stock prices rapidly rise and fall.
What does it mean to own shares in a company?
It means you own a small part of that company and may benefit from its profits.
What is day trading?
Buying and selling stocks within the same day to make quick profits.
What does the Dow Jones Industrial Average measure?
It tracks 30 large U.S. companies and reflects general market trends.
Why do companies go public?
To raise money for growth, expansion, or paying off debt.
what is a stock market crash
A sudden and significant drop in stock prices.
What is a stock exchange?
A marketplace where stocks are bought and sold.
What is diversification?
Spreading investments across different assets to reduce risk.
What is technical analysis?
Studying price charts and patterns to predict future movements.
what is market capilization
The total value of a company’s shares (share price × number of shares).
what causes a bear market
Declining investor confidence, economic slowdown, or negative news.
How do stock prices change?
Prices change based on supply and demand, company performance, and market conditions.
What is value investing?
Buying stocks that appear undervalued compared to their true worth.
What is fundamental analysis?
Evaluating a company’s financial health, earnings, and economic factors.
what is blue-chip company
A large, well-established, financially stable company.
what is a bull market
A period when stock prices are rising and investors are optimistic.
What is a dividend?
A payment made by a company to its shareholders, usually from profits.
What is growth investing?
Investing in companies expected to grow faster than average.
What is a stock market index?
A measurement of a group of stocks used to track market performance.
how do earnings reports affect stock prices
Strong earnings can raise prices; weak earnings can lower them.
how does invester physchology affect stock market
Emotions like fear and greed can drive buying and selling decisions, affecting prices.