Financial Markets 101

If you’ve ever wondered where companies get money to grow, how people invest to make more money, or why the news talks about the stock market all the time, you’re thinking about financial markets — even if you didn’t know it.

What Are Financial Markets?

Financial markets are places where people can buy and sell financial assets — like stocks, bonds and currencies. They help connect people or companies who need money with those who have money to invest. Think of it like this: Imagine that a lemonade stand wants to expand and open up more stands in another neighborhood. To do this, they will need more money. Investors can give them that money in exchange for some of the money that they make selling lemonade. This exchange is exactly what takes place in a financial market.

The Main Types of Financial Markets 

1. Stock Market

2. This is where companies sell shares (stocks) of ownership in companies 

3. Investors buy those shares, hoping that the company does well so the value of the stock increases

4.  Bond Market

5. Governments and companies borrow money and promise to pay it back later with interest 

6. Investors buy these bonds and get paid over time

7. Commodity Market

8. This market trades physical stuff, like gold, oil, and wheat

9. Prices go up or down based on supply, demand, and global events 

10. Foreign Exchange Market

11. Here, people trade different currencies (like dollars for pounds)

12. It’s the largest financial market in the world 

Why Should You Care?

Even of you’re not investing yet, financial markets can still affect your everyday life 

• College loans and car interest rates depend on how healthy the financial system is 

• Jobs can be created or lost based on how well companies are doing 

• Learning this valuable information early in your life gives you an advantage and head start on personal finance and future investing 

Final Thoughts

Financial markets can sound complicated, but they’re really just systems that move money around. By learning the basics now, you’ll be better prepared for smart decisions later — whether that’s buying a car, picking a college major, or investing in your first stock. Money never sleeps, and neither do the markets — so it’s never too early to learn.