Stocks represent ownership in a company. When you purchase a stock, you are buying a small piece of that company. As a stockholder, you have the right to vote on certain company decisions and potentially receive dividends, which are payments made to shareholders from the company's profits. Stock prices can fluctuate based on the company's performance, economic conditions, and investor sentiment. Investing in stocks can be a way to potentially grow your wealth over time, but it also comes with risks as stock prices can go up or down unpredictably.
What is a stock market bubble?
A stock market bubble is a situation in which stock prices rise rapidly and significantly above their intrinsic value, driven by investor speculation and optimism. This can lead to a market that is disconnected from economic fundamentals, resulting in overvaluation of companies and increased risk of a sharp market correction. When the bubble bursts, stock prices can plummet, leading to significant losses for investors.
What is the stock market crash?
A stock market crash is a sudden and severe drop in the value of stocks traded on a stock exchange. This typically results in a significant loss of wealth for investors, widespread panic, and can have a negative impact on the overall economy. Stock market crashes can occur for a variety of reasons, including economic downturns, geopolitical events, and investor sentiment. The most famous stock market crash in history is the Wall Street Crash of 1929, which triggered the Great Depression.
What is a stock price?
A stock price is the current market value of a single share of a company's stock. It is determined by various factors such as the company's performance, market conditions, and investor sentiment. Stock prices fluctuate constantly throughout the trading day as investors buy and sell shares.
