The Stock Market - How It Works and Why It Moves
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What students do
- Trace a 25-year market index chart through three separate crashes and recoveries
- Calculate percent change on a stock price move using the new-minus-old formula
- Explain how supply and demand push a price up or down after an earnings report
- Argue why a long-term investor should stay invested through a bear market
What it covers
- How stock exchanges like the NYSE and Nasdaq match buyers and sellers
- Supply and demand as the force that sets every stock price
- Market indexes like the S&P 500 and the Dow as a scoreboard for the whole market
- The difference between a bull market and a bear market, measured in percent change
Learning targets
- Explain how stock exchanges (like the NYSE and Nasdaq) work to match buyers and sellers
- Explain how supply and demand set stock prices and why prices move on news and earnings
- Describe what a market index (like the S&P 500 or the Dow) measures and how bull and bear markets differ
- Use percent change ((new - old) / old) x 100 to size a market move, and explain why a long-term investor stays calm when the market drops
From one teacher to another
I wanted students to see the market's actual shape instead of just hearing "it goes up over time," so this one hands them a 25-year chart with the dot-com bust, 2008, and the 2020 dip built right in. They calculate the size of each crash themselves with the same percent-change formula, which makes the final argument, that panic-selling locks in a loss, land as math instead of a lecture. It's the lesson I most want students to still remember the first time their own account drops.
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