7 Stock Market Tips (and why they matter)

^{Read time - 3.5 minutes / Disclaimer}

The stock market can:

- Grow your assets.

- Expand your net worth.

- Free you from 9-5 life early.

Unfortunately, investing isn't taught in most schools.

Stock Investing

Most people delay investing for 3 reasons:

1. They think it's too hard.

2. They don't know how to start.

3. They think they need a lot of money.

But once you figure out the basics, starting is pretty easy.

Earlier this month I posted a thread that may be helpful:

Stocks can make you a millionaire.

But 99% don’t know the basics.

Here’s 10 tips to get you started:

— JOHN HENRY (@Millennial_Wlth) April 21, 2025

Today, let's go deeper down the stock market rabbit hole.

I had no clue what I was doing with my first investment.

But my employer said:

"If you put 5% of each paycheck into retirement. We will match it."

So—

I signed up.

And the money was invested in an S&P500 fund (the top 500 companies in the U.S.).

Most retirement accounts have this option.

As I made more money I increased the 5% to 10%, then 15% of each paycheck.

And my retirement account climbed from:

- $0k

- $100k

- $250k+

The truth is—

You don't have to be a stock market whiz.

Or have a bunch of money.

You just have to learn the basics.

A retirement account at work is a good place to start (if you get a match).

Here's 7 stock market tips I've found helpful (I hope they help you too):

Let's dive in:

1. The 11 Sectors

View the stock market like a giant pizza.

A pizza with 11 big slices.

Each slice represents a "sector".

Here they are:

Sectors help organize the stock market into several different pieces (like a pizza).

2. Bear Markets VS Bull Markets

Stocks go up and down.

When they're headed up—

It's called a Bull Market:

- Stock prices rise 20%+

- Investors are optimistic

When they're headed down—

It's called a Bear Market:

- Stock prices drop 20%+

- Investors are pessimistic

^{Photo credit: vectorstock}

Bulls (green) represent a bull market, bears (red) represent a bear market.

3. Stock Market Crashes

Stocks crash regularly.

On average stocks drop:

- 10% every other year.

- 20% every 4 years.

There's usually a reason like:

- The 2020 (Covid Pandemic)

- The 2008 (Financial Crisis)

- The 2000 (Dot-com Bubble)

Stocks dropping 10% or 20% as a whole is a common part of investing.

4. Best And Worst Days

Stocks can pop or plunge.

The S&P500 (top 500 companies in the U.S.)—

• Went up +11.6% on 10/13/2008.

And

• Went down -20.5% on 10/19/1987.

Headlines in the news can affect stock prices like—

"Worst week since the Great Recession"

OR

"Many fear the worst has yet to come"

Stocks can increase or decrease quickly over the short term.

5. Best And Worst Years

Stocks zig and stocks zag.

Since 2000, the S&P500 (top 500 companies in the U.S.)—

• Went up +32.4% in 2013.

And

• Went down -38.4% in 2008.

^{Stock Market Growth (S&P500)}

Stocks can grow a lot or drop a lot over a 12-month period of time.

6. Stock Market Popularity

62% of Americans invest.

According to a 2024 gallup poll that's over 160 million people.

The U.S. is the world's largest stock market.

^{Schwab Modern Wealth Survey}

People are investing earlier and earlier (you can start these days with just $1).

7. Relentless Growth

Stocks continue to grow.

Even though the stock market can pop or drop:

- 20%+ in a day.

- 30%+ in a year.

It remains a long term wealth building tool.

The stock market has grown 10% per year on average the past 30 years.

The Bottom Line

Investing can be a wild ride.

2 best practices I've found to be helpful as a long term S&P500 investor:

1. Not looking at my accounts regularly (once every 3-6 months).

2. Ignoring stock market negativity on the news.

Things like:

"Worst quarter since the 2008 financial crisis, and the swoon is hardly over"

OR

"The last time the market fell this much in December was 1931, during the Great Depression"

The reality is—

No one knows what the stock market is going to do tomorrow, next week, or next month.

What we do know is—

People keep working.

People keep consuming.

People keep buying stuff.

So, the economy (and the stock market) continue to grow as well.

Keep building 💰

See you next week.