Why Does the Stock Market Crash? | Stocks 101 Explained, with Brian Feroldi

Afford Anything

Paula Pant | Cumulus Podcast Network

Entrepreneurship, Business, Investing

4.6 • 3.4K Ratings

🗓️ 9 March 2022

⏱️ 65 minutes

🔗️ Recording | iTunes | RSS

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Summary

#369: To answer these questions, we need a deep, tree-trunk understanding – a core, fundamental understanding – of how the stock market operates. What, exactly, IS a stock – and how are stocks valued? What’s the difference between the Dow Jones, the S&P 500, and the Nasdaq? Why is the market a voting machine in the short-term, but a weighing machine in the long-term? Brian Feroldi, the author of “Why Does the Stock Market Go Up?,” joins us for a Stocks 101 explainer episode. If you’d like a deeper understanding of the world of stocks, you’ll enjoy this explainer episode. And if you have a friend/spouse/coworker who’s said, “I need to learn more about investing,” share this episode with them. Enjoy! For more information, visit the show notes at https://affordanything.com/episode369 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	You can afford anything, just not everything. Every choice that you make is a trade-off
0:13.8	against something else. And that doesn't just apply to your money, that applies to your
0:17.6	time, your focus, your energy, your attention to any limited resource that you need to manage.
0:23.2	Saying yes to something implicitly means, turning away all other opportunities. And that
0:29.3	opens up two questions. First, who do you want to be? What matters most? What do you value?
0:35.8	And that's a very different question than what is the shiny distraction in front of you.
0:39.9	That's the first question. The second follow-up question to that is once you identify those
0:45.2	values, how do you put that into practice? How do you align your decision-making to reflect
0:52.0	which matters most? Answering those two questions and doing it well is a lifetime practice. And
1:00.0	that's what this podcast is here to explore and facilitate. My name is Paula Pant. I am the
1:05.2	host of the Afford Anything Podcast. And today, Brian Faraldi joins us for a super comprehensive
1:13.7	explainer episode about stocks and the stock market. Why does the stock market go up? Why
1:19.9	does the stock market crash? What the heck is a stock? If you or someone you know, a spouse,
1:28.0	a sibling, a friend, has always been a little flummoxed by the world of stocks and investing.
1:36.0	This is your stocks 101 explainer episode. If you find stock market jargon confusing or
1:42.8	if you worry that stock investing is too technical, this is the episode that will start demystifying
1:48.7	the process. We cover what is a stock? Why do stocks have value? What's the stock market?
1:54.6	What's the Dow Jones? What's the S&P 500? What's the NASDAQ? Why do companies go public? How are
2:00.4	stocks valued? What's a PE ratio? And what causes that to change? Why do stocks fluctuate?
2:05.7	Why do they have share prices that go up and down every day? And why does the market as a whole
2:10.3	go up and down every day? And what does that mean for their long-term performance? What causes the
2:16.6	market to crash? What causes it to rise? And why at a fundamental level? Why is it that the stock
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