A stock is a piece of a business. If a pizzeria is worth $100,000 and is split into 1,000 shares, each one is worth $100. If the business grows to $200,000, your share is worth $200. The same happens at scale: NVIDIA has about 24.6 billion shares; multiplied by the price they give its market value (market capitalization).
Key points
What moves the price: the company's earnings, what is expected of it, interest rates, supply and demand, and the mood of the moment.
You earn two ways: the price goes up (appreciation) or the company pays dividends. 100 Coca-Cola shares pay about $212 a year.
The S&P 500 is the 500 large U.S. companies; with a fund like SPY you buy all of them at once.
The market is not a casino: it is owning businesses. Today's price is an opinion; earnings are reality.
A $1.73 stock is almost never cheaper than a $515 one. What matters is how much the company earns per share and how much you pay for those earnings. Berkshire (BRK.B) cost $515 and earned about $40 per share: a P/E of 13. NVIDIA had a P/E of 29. Plug Power cost $1.73 and was losing money, so it has no P/E.
Key points
5 numbers: market cap, earnings per share (EPS), P/E (price ÷ earnings), 52-week range and dividend.
Cheap can get cheaper: Plug Power was 60% below its yearly high.
Red flags: loses money every year, rising debt, more and more shares (dilution), rises only on a viral video, or you cannot explain how it makes money.
You do not buy a price: you buy a business at a price.
Before you press the button: emergency cushion ready, a regulated broker that is a SIPC member, deposit a little, start with an index fund (ETF) and buy with a limit order. A market order buys now, at whatever price there is; a limit order only buys at your price or lower.
Key points
The market is open 9:30 a.m. to 4:00 p.m. Eastern, Monday to Friday (except holidays).
You can buy fractions: $10 of a $500 stock.
SIPC protects up to $500,000 if the broker fails. It does not protect you from the stock going down.
U.S. taxes: sell within 1 year and you pay like your salary; after 1 year, 0%, 15% or 20% depending on income. Not tax advice.
Beginner mistakes: everything in one stock, buying because of a video, checking every 5 minutes, panic selling, using options or margin without knowing how.
Until you sell, your gain or loss is "on paper": it moves up and down. A real example: $500 in Tesla on April 8, 2025 ($221.86) was worth $988.65 on October 8, 2025. Selling, you get your $500 back plus $488.65 of profit. The other way: whoever bought at $479.86 in December 2024 saw $500 drop to $231 in April; selling there would have locked in a real $268.83 loss.
Key points
A loss is only real if you sell… but not every stock comes back. Ask whether the company still earns money and whether the story changed.
The math of the hole: if something falls 50%, it needs to rise 100% to get back.
You do not have to sell everything: if you are up 45%, take 25% of the gain and let the rest keep working.
Other ways: sell in steps, take out your initial investment when it doubles, and decide your exit before you buy.
Bonus lesson · The habit: investing little by little
The average bank pays 0.37% a year while prices rise 3.7% (September 2026 inflation). Investing little by little (the same amount every month) means you buy more shares when the market falls and fewer when it rises. In 2022 the S&P 500 fell 25%; those who kept contributing bought at a discount.
Key points
Cushion first: the Faro rule is between 40% and 60% of your savings, liquid and separate.
If your job matches your 401(k), take it: it is free money.
Small and steady: same amount, same day, no guessing the market.
Diversify, do not panic sell, and think in years, not days.
Bonus lesson · Build your portfolio: the Faro pyramid
A portfolio is not one stock: it is a team. The Faro pyramid puts 60% in foundations (index funds and dividends), 30% in growth (AI, defense, minerals) and 10% in exploration (space, biotech, quantum). Over 5 years, exploration fell more than 50% at times, but because it was small it did not sink the portfolio.
Key points
5 to 15 pieces; no single stock above 10–15%.
Different sectors, so they do not all fall on the same day.
Speculative positions, 10% at most.
Rebalance once or twice a year and follow the thesis, not the daily price.
Examples with real data as of October 9, 2026 (Robinhood, FRED, BLS). Videos are in Spanish.
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Frequently asked questions
How much money do I need to start investing?
Very little: many brokers sell fractional shares, so $10 or $25 is enough to buy. The important part is having your emergency cushion first.
Is it better to start with a single stock or an index fund?
To start, an index fund (ETF) such as an S&P 500 fund spreads your money across hundreds of companies at once. Single stocks can rise more, but they can also fall more.
What is a stock's P/E?
Price divided by earnings per share: how many dollars you pay for each dollar the company earns in a year. A low P/E is not always a bargain and a high one requires growth.
When do I pay taxes on my stocks?
In the U.S. you pay when you sell at a profit (and on dividends). Sell within 1 year and it is taxed like salary; after 1 year, 0%, 15% or 20% depending on income. Ask a professional.
Is a loss real if I do not sell?
Until you sell it is a paper loss. But not every stock recovers: if the company stopped earning or its story changed, selling at a loss can also be a good decision.
⚠️ Educational content, not financial advice. Investing involves risk: the value of your investments can go down. Examples from the past are chosen looking backward and do not guarantee the future.