Why the Stock Market Goes Up (5 things to know)
Nov 22, 2025Read time - 4 minutes / Disclosure
Knowing why the stock market goes up:
- Helps simplify investing.
- Helps it make more sense.
- Helps you feel more certain.
Unfortunately, the stock market can be a mysterious thing.
The Future
Having uncertain feelings about the stock market:
- Going up.
- Going down.
- Going nowhere.
...keeps many people from investing.
But when looking at history.
It's hard to miss how much the stock market has grown.
40 years of the stock market
I remember opening my first investment account.
Stocks were a mystery to me at the time.
But my job said..
"If you put 5% of your paycheck into this retirement account every month, we'll match it."
So I put in $100 every paycheck.
And my job put in $100 every paycheck.
Eventually I found ways to save more money and bumped that $100 to $200 every paycheck.
And over time money in that account grew from $0 to:
- $10k.
- $25k.
- $50k.
Then I started working as a banker at Chase.
And thought more about things I could do with my money — to leave 9-5 life a few decades early.
The goal wasn't to completely stop working.
The goal was to get to a point where I only needed to work 2-4 hours per day.
On things I truly enjoy (like this little online business).
5 things worth doing:
— JOHN HENRY (@thejohnhenry_) November 18, 2025
1. Studying money.
2. Investing every month.
3. Sticking with it long term.
4. Escaping the rat race early.
5. Building & living your ideal life.
It's not easy. But it's worth it.
I realized investing would be a big part of my journey.
So I opened a 2nd investing account called a brokerage account.
And followed billionaire investor Warren Buffett's advice:
"The goal of non-professionals shouldn't be to pick winners, rather to own businesses bound to do well, a low-cost S&P 500 index fund will achieve this goal." — Warren Buffett
Instead of investing in individual stocks.
I followed Warren Buffett's advice and invested in an S&P500 index fund which includes the 500 largest companies in America.
Finding different ways to save money helped me invest more money (things like this).
Over time that brokerage account and my retirement account at work grew from $50k:
- To $75k.
- To $100k.
- To $150k.
- To $250k.
- To $350k.
- To $500k+.
Eventually I left Chase to start this little online business.
And my obsession with the stock market kept growing.
The Stock Market Levers
Here's 5 reasons I've learned why the stock market goes up (hope it's useful).
Let's dive in:
1. The Results
Every 3 months companies listed on the stock market share how they're doing.
Things like:
- Their sales.
- Their expenses.
- And their profit.
You can find this info in the "investor" section on a company's website with fancy looking charts and graphs.
When a company shares how they're doing.
If people think the company is on track.
They buy the stock.
And if more people buy the stock than sell the stock.
There's a good chance the stock price goes up.
Thousands of companies share their results every 3 months. A lot of good news helps drive the stock market up.
2. The Inflation
Almost every year the price of things increase.
Things like:
- Cars.
- Food.
- Insurance.
Sometimes the price goes up 2%.
Sometimes the price goes up 3%.
And sometimes the price goes up 8% (like in 2020).
Something that cost $100 in 2000.
Now costs almost double the price in 2025 because of inflation according to the government:
US inflation calculator dot com
As companies charge more money for things they sell, they make more money which can drive the stock market up.
3. The Buybacks
Sometimes companies buy their own stock (yes it's legal).
It's called a "buyback" or sometimes it's called a "share repurchase".
Apple has been doing it for years.
Buybacks are often criticized as a short term way to boost the price of a stock.
Many companies buying their own stock can drive the stock market up.
4. The Bets
People sometimes bet big on the future.
If they expect a company to make a lot more money in the future then it's making today.
They might buy the stock.
For example:
Many people betting big on the future of companies can drive the stock market up.
5. The Media
Stories in the news can affect the stock market.
For example:
In 2021, there were many stories in the news about AMC (the movie theatres).
The stock price went from $13 a share to $250+.
AMC stock
But, it didn't last.
Stories in the news can affect individual stocks and the entire stock market.
The bottom line
Most people see the stock market as a complicated thing.
I sure did at first.
It can be easy to get lost reading about the stock market in the news or hearing about it.
But it doesn't have to be that way.
The first several years of my stock investing journey.
I only invested in 1 thing.
An S&P500 fund (like Warren Buffett suggests).
Which includes 500 of the largest companies in America.
Most retirement accounts at work offer an S&P500 fund.
My non retirement investing account was invested in The Vanguard S&P 500 Fund (VOO).
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."
— Warren Buffett
That's all for today.
See you next Saturday.
P.S.
If you're interested in learning more about the benefits of investing try this:
