Stock Market Explained

Question 1

What is the difference between New York Stock Exchange (NYSE) and NASDAQ and why are they important?

Answer 1

NYSE is older and has a physical aspect; Nasdaq is younger and completely electronic.

Both are important indicators of the state of the stock market.

Question 2

What does an index tell us and how does it work?

Answer 2

An Index can tell us how well a stock market is performing.

Indexes take a bunch of share prices and transform them into one clean number.

Question 3

What are a couple of US indexes?

Answer 3

1. S&P 500
2. Dow Jones

Question 4

How can a stock market be a force for good?

Answer 4

Drives companies/CEOs to make good decisions to have higher valued stocks, give shareholders greater returns, and grow and create jobs.

Question 5

What does an Index fund do?

Answer 5

Puts a little bit of your money in all companies in the index - basically you match the stock market.