Stock Market Basics
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📅 1/19/2026
What is the Stock Market?
A marketplace where buyers and sellers trade shares of publicly listed companies.
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How Stocks Work
- Stocks represent ownership in a company; buying shares makes you a partial owner.
- Prices fluctuate based on supply, demand, and company performance.
- Blue-chip stocks (e.g., Apple, Amazon) are stable, while growth stocks are riskier.
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Key Investment Strategies
- Long-term investing (buy-and-hold) reduces risk compared to short-term trading.
- Diversification across sectors minimizes losses if one industry underperforms.
- Dollar-cost averaging invests fixed amounts regularly to smooth out volatility.
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Risks & Rewards
- Historically, stocks average 7-10% annual returns but can drop sharply in downturns.
- Market crashes (e.g., 2008, 2020) are temporary but test investor patience.
- Research and due diligence help identify undervalued stocks with growth potential.
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Getting Started
- Open a brokerage account (e.g., Fidelity, Robinhood) to begin trading.
- Start with ETFs or index funds for low-cost, diversified exposure.
- Stay informed via financial news, earnings reports, and economic indicators.
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