Stock Market Basics: 50 Essential Questions Answered

Q: What exactly is the stock market?

A: The stock market is a collection of exchanges and markets where shares of publicly traded companies are bought and sold. Think of it as a giant marketplace where investors can purchase ownership stakes in businesses. The two main purposes are: (1) allowing companies to raise money by selling shares to the public, and (2) providing investors a way to buy and sell these ownership stakes.

Q: What are the major stock exchanges?

A: The major U.S. stock exchanges include:

• New York Stock Exchange (NYSE): The largest exchange by market cap, home to many blue-chip companies
• NASDAQ: Electronic exchange known for technology companies like Apple, Microsoft, and Google
• CBOE: Specializes in options and derivatives trading

Q: When is the stock market open?

A: The U.S. stock market is open Monday through Friday from 9:30 AM to 4:00 PM Eastern Time. The market is closed on weekends and major holidays like New Year's Day, Independence Day, Thanksgiving, and Christmas. There are also extended hours for pre-market (4:00-9:30 AM) and after-hours (4:00-8:00 PM) trading with some brokers.

Q: What is a stock and how does it work?

A: A stock represents partial ownership in a company. When you buy shares, you become a shareholder and own a tiny piece of that business. Here's how it works:

Q: What makes stock prices go up and down?

A: Stock prices are determined by supply and demand, influenced by many factors:

Q: How much money do you need to start investing?

A: You can start investing with as little as $1-$5 using fractional shares or robo-advisors. However, here's what financial experts recommend:

Practical starting amounts: $50-$100/month for beginners, $1,000+ for more diversified portfolios.

Q: What's the best way for beginners to start investing?

A: For beginners, follow this step-by-step approach: