Stocks aren't just pieces of paper. When you buy a share of stock, you are taking a share of ownership in a company. Collectively, the company is owned by all the shareholders, and each share represents a claim on assets and earnings. There are many different kinds of stocks. The most common ways to divide the market are by company size, sector, and types of growth patterns.
Stock prices track earnings.
Over the short term, the behavior of the market is based on enthusiasm, fear, rumors, and news. Over the long term, though, it is mainly company earnings that determine whether a stock's price will go up, down, or sideways. Stocks are your best shot for getting a return over and above the pace of inflation. As a result, stocks are the best way to save money for long-term goals like retirement. Individual stocks are not the market.