Day: August 13, 2025

A stock market is a marketplace where investors buy and sell shares of publicly traded companies. Investors can buy and sell these shares directly on a stock exchange or through their investment account with a brokerage firm. A healthy stock market helps support the economy in several ways. For example, when companies’ shares rise in value, it can give individual shareholders more money to spend and may help encourage employee bonuses. On the other hand, when share prices go down, it can hurt individual investors who have to sell at a loss. A number of factors can cause the price of a particular company’s stock to go up or down, from inside events like a faulty product to external influences such as political developments.

Stocks are an attractive way to build wealth over the long term because they offer a potential for growth. However, stocks come with risk, and on average large-company stocks have lost money one out of three years over the past 100 years. Buying and selling shares of stocks isn’t something to do on impulse, but rather with careful research and a disciplined approach that considers your goals, time horizon, and tolerance for risk.

Aside from providing a marketplace for trading, the stock market also facilitates price discovery and helps allocate resources to the most productive enterprises. Investors’ buying and selling decisions, based on myriad factors, signal to other investors which companies have potential for success and growth, and which are less likely.

GDP is one of the most important economic indicators. It tells us how big a country’s economy is and, when compared to the past, whether it’s growing or shrinking. It’s a critical number for investors, economists, and policymakers alike.

GDP measures the monetary value of all final goods and services—that is, those sold on the market—produced within a country in a given period, usually a year. This includes all market and nonmarket production, like government spending and household production. A similar measure is gross national product (GNP), which also includes household production but excludes foreign ownership of capital.

Unlike other measures of production, GDP uses current, or nominal, prices. This means that a rise in GDP from one year to the next must be adjusted for inflation. This is done using a statistical tool called a price deflator, which converts GDP from nominal to constant prices. This process allows economists to tell whether the increase in GDP is due to more output or simply higher prices.

Another problem with GDP is that it only accounts for products that are sold to consumers or businesses. It does not account for the value of unrecorded or informal production, such as work done by volunteers or in households. This means that while GDP may show an increase in the sale of pollution control equipment, it does not address how much dirtier or healthier the air and water actually are. Likewise, GDP does not include the cost of raising children or acquiring education.