What is a stock?
A share of stock represents an ownership interest in a company. Shareholders may benefit from business growth and dividends, but they also bear the risk that the company or its stock price performs poorly.
Why stock prices move
Prices reflect what buyers and sellers agree on at a particular moment. Earnings, interest rates, competition, economic expectations, investor sentiment, and new information can all influence that agreement.
Valuation is not price
Valuation attempts to estimate what a business may be worth using earnings, cash flow, assets, growth, and risk. A low share price does not necessarily mean a company is inexpensive.
Dividends
Some companies distribute part of their profits to shareholders. Dividends can be reduced or stopped, and they should be assessed alongside the company's financial health and total return.