Stock Market Fundamentals: free beginner lessons
Stock Market Fundamentals is a FinCon topic with 4 short lessons. Learn how the stock market works and how to start investing confidently. Each lesson takes about five minutes and ends with a quiz.
What will I learn in Stock Market Fundamentals?
You will work through: How the Stock Market Works, Index Funds & ETFs Explained, Reading Stock Data & Metrics, Building Your Portfolio.
What is in each Stock Market Fundamentals lesson?
How the Stock Market Works
The stock market is simply a marketplace where people buy and sell pieces of companies. 🏢 A "stock" = a tiny ownership share of a company 📈 When the company does well, your share becomes more valuable 📉 When it struggles, the value drops Think of it like owning a slice of a pizza shop. If the shop earns more, your slice is worth more!
Important terms to know: 📊 Index — A group of stocks tracked together (S&P 500 = top 500 US companies) 💹 Bull Market — Prices are rising (optimism) 🐻 Bear Market — Prices are falling 20%+ (pessimism) 💰 Dividends — Cash payments companies share with stockholders 📉 Volatility — How much prices swing up and down The S&P 500 has averaged ~10% annual returns over 90+ years.
What does owning a stock mean? Stocks represent ownership! When you buy a share, you own a tiny piece of that company and share in its success (or struggles).
In March 2020, the stock market crashed 34% in 23 days due to COVID-19. Many panicked and sold everything. But those who stayed invested? The market recovered ALL losses within 5 months and went on to reach new all-time highs. $10,000 invested in the S&P 500 in January 2020: • If you panic-sold in March: $6,600 • If you held through December 2020: $11,800 • If you held to December 2023: $14,200
Market crashes are scary but temporary. In 90+ years, the market has ALWAYS recovered. Time in the market beats timing the market.
What has the S&P 500 averaged in annual returns over 90+ years? The S&P 500 has averaged roughly 10% annual returns historically—though individual years can vary wildly!