The stock market is a network of exchanges — like the NYSE and Nasdaq — where shares of publicly traded companies are bought and sold. When you buy a share, you're buying a small ownership stake in that company.

Prices move based on supply and demand. When more investors want to buy a stock than sell it at the current price, the price rises; when more want to sell than buy, it falls. New information — earnings reports, economic data, news — constantly shifts how investors value a company.

A stock is ownership in a single company. An ETF (exchange-traded fund) holds a basket of many assets and trades on an exchange like a stock, offering instant diversification. A mutual fund is similar to an ETF but is priced once daily after markets close, and is often actively managed with higher fees.

Market capitalization is a company's share price multiplied by its total shares outstanding. It's a rough measure of the company's overall size and is used to group companies into categories like large-cap, mid-cap, and small-cap.

An index tracks the combined performance of a basket of stocks to represent a market or sector. The S&P 500 tracks roughly 500 large US companies and is the most widely used benchmark for the overall US stock market. The Dow Jones and Nasdaq Composite are two other commonly cited indices.

A bull market is a sustained period of rising prices and investor optimism. A bear market is typically defined as a decline of 20% or more from a recent high, often accompanied by pessimism about the economy.

A dividend is a portion of a company's profits paid out to shareholders, usually quarterly, on a per-share basis. Not all companies pay dividends — many growth-focused companies reinvest profits back into the business instead.

A market order executes immediately at the best available price. A limit order only executes at a price you specify or better, giving you price control but no guarantee the order will fill.

Many brokers now offer commission-free trading and support fractional shares, so you can start investing with a small amount of money. What matters most over time is consistency and staying invested, not the size of your first contribution.

Yes — stock prices can be volatile and can decline, sometimes sharply, over short periods. Diversification, a long time horizon, and avoiding emotionally driven decisions are common ways investors manage that risk. This page is for educational purposes and isn't personalized financial advice.