Investing in the Stock Market

Video Synopsis – “How the Stock Market Works (and Why Long-Term Investors Should Care)”

In this quick explainer, CAPTRUST educator Debra Gates demystifies Wall Street for first-time savers and retirement-plan participants who keep hearing “put your money in stocks” but aren’t sure why.

1. What a stock really is

When a company issues shares, it’s raising cash to hire people, build products, or expand into new markets. The stock market is simply a matching engine—buyers on one side, sellers on the other—agreeing on a price that changes every second as news, profits, and global events shape expectations.

2. Why prices rise—and sometimes fall

A share gains value when other investors believe future earnings will be higher (think breakthrough products or fatter profit margins). Prices slide when a business stumbles or whole economies hit turbulence, as during the dot-com bust, 9/11, or the Great Recession.

3. The long-term record

Yes, stocks are volatile in the short run, but Gates highlights a powerful statistic: over every rolling 20-year period, the S&P 500 has delivered a positive return—and has outpaced bonds and cash. For anyone saving 30-plus years for retirement, that growth engine is hard to ignore.

4. Managing risk with funds

Individual stocks can be risky; most workplace plans instead use mutual funds or target-date funds that hold hundreds of companies. Diversification means one laggard can be offset by another winner, smoothing the ride while still capturing market growth.

5. Taking the next step

Your plan menu already sorts stock funds by company size and geography (U.S., international, emerging markets). Not sure how much to allocate? Schedule a call with a CAPTRUST adviser for guidance tailored to your time horizon and comfort with market swings. Remember: planting the seed today is what lets you enjoy the shade in retirement.

To download a copy of the transcript, click here.