Learn the markets in plain English

Short guides to the stock market terms and numbers you hear every day. No jargon. No hype.

• What "the market was up 1%" actually means
  When the news says the market rose 1%, it usually means one index, measured from the day before. Here is what that number does and does not tell you.
• Bull market, bear market, correction: what the words mean
  Bull, bear, correction and pullback are the market's most used labels. Here is what each one means and the rough thresholds behind them.
• What is the S&P 500, in plain English
  The S&P 500 tracks about 500 of the largest US companies. Here is what it measures, how it is built, and why the news quotes it every day.
• What is the TSX, in plain English
  The S&P/TSX Composite is the main measure of the Canadian stock market. Here is what is in it and why it moves differently from US markets.
• What moves the Canadian dollar (the loonie)
  Interest rates, oil prices and the global mood all push the Canadian dollar up and down. Here is how each one works, in plain English.
• US vs Canadian markets: how they move together
  US and Canadian stock markets often rise and fall together, but not always. Here is why they are linked and why they sometimes go separate ways.
• What is the Dow Jones, and why it is not the whole market
  The Dow tracks just 30 large US companies and weighs them in an unusual way. Here is what it measures and why the S&P 500 often tells you more.
• What is the Nasdaq
  Nasdaq is both a stock exchange and the name of two indexes heavy in technology companies. Here is which is which and why it swings more than other markets.
• What is the Russell 2000, and why small companies matter
  The Russell 2000 tracks about 2,000 smaller US companies. Here is what it measures and why investors watch it alongside the S&P 500.
• How interest rates move stock prices
  Why stocks often fall when interest rates rise, and rise when rates fall. Three plain reasons, with no jargon.
• What the Bank of Canada does
  The Bank of Canada sets the policy interest rate that shapes Canadian mortgages, savings and the loonie. Here is how it works in plain English.
• What the Federal Reserve does, and why markets watch it
  The US Federal Reserve sets the interest rate that ripples through loans, savings and share prices. Here is how it works in plain English.
• What the 10-year Treasury yield tells you
  The 10-year Treasury yield affects mortgages, loans and stock prices. Here is what it is, why it moves, and why investors watch it so closely.
• What inflation (CPI) numbers mean for your money
  The Consumer Price Index measures how fast everyday prices are rising. Here is how it works, what "core" means, and why markets react to it.
• What the jobs report is and why it moves markets
  The monthly US jobs report shows how many jobs were added and the unemployment rate. Here is how to read it and why investors care.
• What a P/E ratio is
  The price-to-earnings ratio is the most quoted number for judging whether a share looks expensive. Here is how it works and where it misleads.
• What an earnings report is, and how to read one in five minutes
  Public companies report their results every three months. Here are the few numbers that matter most, and why shares can fall even on good results.
• What a dividend is
  A dividend is cash a company pays to its shareholders out of profit. Here is how dividends work, what yield means, and the dates that matter.
• What an ETF is
  An exchange-traded fund is a basket of investments you can buy and sell like a single share. Here is how ETFs work and what to check before you look at one.
• Index funds vs picking stocks: the plain facts
  Index funds buy a whole market. Stock pickers try to beat it. Here is how the two approaches compare on cost, risk, effort and results.
• Why oil prices move the stock market
  Oil touches almost every part of the economy. Here is why changes in its price ripple through stocks, inflation and the Canadian dollar.
• Why gold goes up when people are worried
  Gold has a long reputation as a safe place for money in uncertain times. Here is why investors buy it when they are nervous, and what else moves it.
• What a recession is, and how it is measured
  A recession is a broad, lasting drop in economic activity. Here is how it is defined in the US and Canada, and what it tends to mean for markets.
• What market cap is
  Market cap is the total value of a company's shares. Here is how it is calculated, what large-cap and small-cap mean, and what it does not tell you.
• What a stock split is
  A stock split gives shareholders more shares at a lower price, while the total value stays the same. Here is how splits and reverse splits work.
• What short selling is
  Short selling is a way to profit if a share price falls. Here is how it works, why the risk has no upper limit, and what a short squeeze is.
• What an IPO is
  An IPO is the first time a private company sells shares to the public. Here is how the process works, who sets the price and what lock-ups are.
• What a bond is
  A bond is a loan you make to a government or company in return for interest. Here is how bonds work and why their prices move opposite to yields.
• What an inverted yield curve means
  An inverted yield curve is when short-term bonds pay more than long-term ones. Here is what that means and why it gets so much attention.
• What the VIX is
  The VIX measures how much movement traders expect in the S&P 500 over the next month. Here is how to read it and what it does not tell you.
• The 11 stock market sectors
  Stocks are sorted into 11 sectors based on what each company does. Here is what each sector covers and why the grouping is useful.
• What GDP means
  GDP measures the total value of goods and services an economy produces. Here is how it is measured, how it is reported and why markets watch it.
• How compound growth works
  Compound growth means earning returns on your past returns, not just on what you put in. Here is how it works, with simple examples and the rule of 72.
• What dollar-cost averaging is
  Dollar-cost averaging means investing a fixed amount on a regular schedule. Here is how it works, what it does and what it does not do.
• Pre-market and after-hours trading
  Some stocks trade before the market opens and after it closes. Here is how extended-hours trading works and why prices can behave differently.
• What moves a stock price
  A stock price moves when buyers and sellers change their view of what a company is worth. Here are the main forces behind those changes.
• Mutual funds vs ETFs
  Mutual funds and ETFs both pool money to buy many investments. Here is how they differ in trading, pricing, fees and taxes.
• What a 401(k) and an IRA are
  The 401(k) and the IRA are the two main US retirement accounts. Here is how each one works, and the difference between traditional and Roth.
• Market orders and limit orders
  A market order trades right away at the best available price. A limit order sets the price you will accept. Here is how each works.
• What volatility means
  Volatility measures how much and how quickly a price moves up and down. Here is how it is measured, what beta is and why it matters to investors.
• A stock market glossary in plain English
  Short, plain-English definitions of common stock market and investing terms, from bear market to yield.