Level 1 - Stock market
Stocks and ETFs
Understand company shares, diversified funds and why ownership structure matters.
Stocks
A stock is a share of ownership in a company. Its price can respond to earnings, debt, growth expectations, interest rates and wider market sentiment. Owning a stock concentrates your result in one business, so company-specific risk matters.
ETFs
An ETF is an exchange-traded fund that usually holds a basket of assets. Some ETFs track broad indexes, while others focus on sectors, countries, bonds or themes. ETFs can reduce single-company risk, but they still move up and down and may include currency, tracking and liquidity risks.
Choosing what to study
Beginners often learn faster by comparing a single stock with a broad ETF. The stock teaches company risk; the ETF teaches diversification and market-wide movement. Both still need position sizing and a clear reason for the trade or investment.
Practical example
Buying one bank stock exposes you mostly to that bank. Buying a broad market ETF may spread exposure across hundreds of companies, but the ETF can still fall during a market sell-off.
Important terms
Lesson quiz
Answer all 3 questions, then submit. You need 3/3 correct to unlock the next lesson.