Stock Market Basics: how stock prices work
If you're new to investing, this page explains what stocks are, why prices move, and how to think like a long-term investor.
What a stock represents
A stock is ownership in a business. Over the long run, investors are paid through earnings growth, cash flow, dividends, and buybacks.
What moves stock prices
- Earnings: higher profits usually support higher prices.
- Interest rates: higher rates can compress valuation multiples.
- News + sentiment: short-term volatility is often emotional.
- Valuation: price vs intrinsic value matters for long-term returns.
Next step: learn intrinsic value
Intrinsic value helps you decide whether a stock price is cheap or expensive relative to fundamentals.
Intrinsic Investor is for education and research only. Not financial advice.