📈 What is the Stock Market?
The stock market is a platform where companies (like Apple or Tesla) sell shares of ownership to investors.
- 📊 Shares: Represent a portion of a company's equity
- 💰 Stock Exchange: Central marketplace for trading (e.g., NYSE, NASDAQ)
- 📈 Stock Price: Determined by supply and demand
🧠 Key Concepts to Understand
- Bull Market 📈
Prices rise over time (e.g., tech sector growth in 2020s) - Bear Market 📉
Prices fall for 2+ months with a 20% decline from peak - Dividend 💸
Regular payouts to shareholders (e.g., Coca-Cola's 5% annual yield)
💼 How to Start Investing
- Open a brokerage account (e.g., Robinhood, E*TRADE)
- Research companies using tools like Yahoo Finance or Bloomberg
- Diversify your portfolio to reduce risk
- 📌 Example: Invest in 5 different sectors (Tech, Healthcare, Energy...)
⚠️ Risks and Considerations
- 🧨 Market volatility: Prices can swing dramatically in short periods
- ⚖️ Fees: Brokerage commissions and transaction costs
- 📉 Long-term vs short-term: Time horizon affects strategy
📚 Expand Your Knowledge
For deeper insights into stock trading strategies, visit our Understanding Stock Trading guide.