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Finabase Learn
Investing basics
The foundations every investor needs — what stocks and funds are, how markets work, risk and return, diversification and building a first portfolio.
Foundations
- What is a stock? A complete beginner’s guide to shares What owning a share really means, why companies issue stock, how prices are set, how investors make or lose money, and the risks to understand first.
- Compound interest: how growth on growth builds wealth How compounding works, the formula and the rule of 72, worked tables for lump sums and monthly savings, and how fees, taxes and inflation slow it down.
- Risk and return: volatility, drawdowns and the equity premium Why higher expected returns come with bigger swings, how to measure risk with volatility and drawdown, and what five years of SPY and AGG data show.
- Bull and bear markets: definitions, corrections and history What makes a bull or bear market, the 10% and 20% conventions, how often big declines have happened, and what SPY’s 2022 bear market and 2025 correction looked like.
- Growth vs value investing: styles, P/E and the long record How growth and value stocks differ, how style indexes sort them, what P/E and price-to-book tell you, and how VUG and VTV compared year by year since 2004.
- Dividends and DRIPs: key dates, yield and reinvestment How stock dividends are declared and paid, what the ex-dividend and record dates mean under T+1, how to calculate yield and payout ratio, and how DRIPs compound.
- Stock splits explained: forward splits, reverse splits, examples What happens to your shares, price and market cap in a forward or reverse stock split, why companies split, the key dates, and real examples such as NVIDIA’s 10-for-1.
- Stock buybacks: how share repurchases work and what they do How companies buy back their own shares, the EPS arithmetic with worked examples, SEC Rule 10b-18, the 1% excise tax since 2023, and how to judge a buyback.
- How IPOs work: from S-1 filing to first trade and lock-up How a US company goes public: the S-1, SEC review, roadshow, pricing, allocation and lock-ups, plus how direct listings and SPACs differ and the risks to investors.
- How to research a stock: a step-by-step guide for beginners A six-step process for researching a company before you invest: the business, SEC filings on EDGAR, the financial statements, valuation, risks and a written thesis.
How markets work
- Stock exchanges explained: NYSE, Nasdaq and where your order goes How US stock exchanges work, how they differ from dark pools and wholesalers, what listing on the NYSE or Nasdaq requires, and where a retail order really executes.
- Stock market indexes: S&P 500, Dow, Nasdaq and Russell explained How the S&P 500, Dow Jones Industrial Average, Nasdaq-100 and Russell indexes are built and weighted, with worked examples and five years of index-ETF data.
- Stock market hours: regular, pre-market, after-hours and overnight US stock market hours in Eastern Time, the 2026 holidays and early closes, how pre-market, after-hours and overnight sessions work, and their risks.
- Bid-ask spread: what it is, what it costs and how to read it What the bid, ask and spread mean, how the NBBO and market makers set them, how to calculate what a spread costs you, and why liquid and illiquid stocks differ so much.
- Market capitalization: formula, free float and enterprise value How market cap is calculated and where the share count comes from, why indexes use free-float market cap, how size buckets work and how enterprise value differs.
- Stock market sectors and industries: GICS and sector ETFs explained How the GICS system sorts companies into 11 sectors and 163 sub-industries, how sector ETFs work, cyclical versus defensive sectors, and a year of real sector returns.
- How to read a stock quote: every field explained What every field on a stock quote means, from last price, change, bid and ask to volume, ranges, market cap, P/E, EPS and yield, with a real example.
ETFs and funds
- What is an ETF? How exchange-traded funds work How an exchange-traded fund is built, how authorized participants create and redeem shares, why price tracks NAV, and the main ETF types to know.
- ETFs vs. mutual funds: costs, taxes, trading and which fits A side-by-side guide to ETFs and mutual funds: how each is priced and traded, what each costs, why ETFs are usually more tax-efficient, and the new ETF share classes.
- Mutual funds explained: NAV, share classes, loads and 12b-1 fees How an open-end mutual fund works, how its daily NAV is set, what loads, share classes and 12b-1 fees cost you, and how to read the prospectus fee table.
- Index investing: passive vs. active funds and what the data shows What index investing is, how index funds track a benchmark, what S&P’s SPIVA scorecards show about active managers, and how to read tracking error.
- Expense ratios and fund costs: what you pay and how it compounds How a fund’s expense ratio is charged, what a 1% fee costs over 40 years, and the other costs to check: loads, 12b-1 fees, trading costs, spreads and advisory fees.
Building a portfolio
- Diversification: why spreading your investments reduces risk How diversification works through correlation, the difference between risk you can diversify away and market risk you can’t, with worked math and real correlations.
- Asset allocation: how stock, bond and cash mixes have behaved What asset allocation is, how 23 years of stock and bond mixes actually behaved, how rebalancing and target-date funds work, and what shapes the right mix.
- Rebalancing a portfolio: calendar vs threshold, drift and taxes Why a portfolio drifts away from its target mix, how calendar and threshold rebalancing work, what 23 years of SPY/AGG data show, and how to rebalance tax-efficiently.
- Dollar-cost averaging vs lump sum: how DCA works and what data show How dollar-cost averaging works, a worked share-purchase table, and 33 years of SPY data on how often investing a lump sum at once beat spreading it out.
- Time horizon and risk tolerance: matching investments to goals How time horizon, risk capacity and risk willingness shape what you invest in, why an emergency fund comes first, and what 33 years of SPY returns show.
- How to build your first portfolio: a step-by-step beginner outline An eight-step educational outline for a first portfolio: foundations, goals, accounts, allocation, fund-selection criteria, costs, automation, rebalancing and behavior.
Accounts and taxes
- Brokerage accounts explained: types, opening, fees and protection How US brokerage accounts work: individual, joint and custodial accounts, cash vs margin, what opening one involves, fees, SIPC limits, BrokerCheck and ACATS transfers.
- Retirement accounts explained: 401(k), IRA, Roth and 2026 limits How US retirement accounts work in 2026: 401(k) and 403(b) plans, employer matches, traditional and Roth IRAs, SEP and SIMPLE plans, HSAs, limits, RMDs and penalties.
- Roth vs traditional IRA: how to compare tax now and tax later A worked comparison of Roth and traditional IRAs for 2026: the after-tax math, income phase-outs, deduction limits, the five-year rules and Roth conversions.
- Capital gains tax on stocks: 2026 rates, holding periods and basis How US federal tax treats stock and fund gains in 2026: short- versus long-term, the 0%, 15% and 20% thresholds, the 3.8% NIIT, cost basis methods and loss limits.
- How dividends and interest are taxed: qualified, ordinary, muni How US federal tax treats dividends and interest in 2026: qualified vs ordinary dividends, the 60-day holding test, Forms 1099-DIV and 1099-INT, and muni bonds.
- Tax-loss harvesting: how it works, the wash-sale rule and its limits How tax-loss harvesting offsets gains and up to $3,000 of income under 2026 US federal rules, with worked examples, the wash-sale limit and the trade-offs.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.