Investor Education
Understanding why a market moved starts with understanding how markets work in the first place. These guides cover the foundations: what a correction or bear market actually is, how stocks, bonds, and the dollar relate to each other, what volatility measures, and how interest rates and inflation feed into investment returns.
A stock’s price can be thought of as the present value of the cash its business will produce in the future. Raise expected cash flows and the value goes up. Raise the interest rate used to discount those cash flows, or the extra return investors demand for taking risk, and the value goes down. Nearly every concept in this section comes back to those three levers.
None of this is about predicting tomorrow’s price. It is about having a clear framework so that headlines make sense, and so that short-term swings are easier to put in context.
Key topics in investor education
Bull markets, bear markets, and corrections
The conventional thresholds and what they do and do not mean.
Stocks, bonds, and the dollar
How the three move together and why the relationship changes when inflation is high.
Interest rates and stock valuations
Discounting, competition from bonds, and borrowing costs explained simply.
The VIX and volatility
What the market’s fear gauge measures and how to read it.
What "priced in" means
Why expected news rarely moves markets and how futures reveal expectations.
Risk management basics
Time horizon, diversification, costs, and why certainty is a red flag.
What to watch
- Your own time horizon before reacting to any single day’s move
- Whether stocks and bonds are moving together or in opposite directions
- The VIX alongside stock prices to judge whether a pullback is ordinary or stressful
- Costs and taxes that frequent trading adds up over time
Frequently asked questions
What is the difference between a correction and a bear market?
A correction is commonly defined as a decline of 10% or more from a recent high. A bear market is commonly defined as a decline of 20% or more. Both are conventions used by investors and the media, not official designations.
Why do bond prices fall when interest rates rise?
Existing bonds pay fixed interest. When new bonds offer higher rates, older bonds become less attractive, so their prices fall until their effective yield matches the market.
Is understanding market triggers a reason to trade more often?
No. Knowing why markets move helps with context and decision-making, but frequent trading on headlines tends to raise costs and risk. For personal decisions, consider a licensed financial professional.
Official sources
For the full picture, read our complete guide to what moves the stock market.