I don't really know anything but I like investing and tracked this for a few years. Here's a best shot explanation from someone that's also not an economist.

For the current 2022 problems let's zoom in on what happened over the last three years. In 2020 there was a collapse in the US economy from covid. The fed jumped in and saved the day by expanding their balance sheet and dumping billions per day into the American economy.

With QE the fed sets the federal interest rate to 0% and increases the money circulating in the economy. The fed buys up long-term securities from banks with zero interest and pays those banks tasty capital in exchange. Most of that new money gets lent out from the bank to consumers and businesses but ~10% is retained for capital reserves (in case the loan goes bad).

A side effect of QE is that it can heat up the economy a little too much which causes inflation. The reason behind inflation is that more money is being created so the value of the currency weakens. In theory the fed would time the QE just right so it could help correct a market crash but end it before inflation gets too bad.

When things got hot in 2020, they got super hot! There was the covid stimulus and a bunch of complex things that caused that. The fed kept QE in place to help boost business and lower unemployment. They had certain goals in mind for what "good enough" looked like and wanted to keep QE until we got there.

Another potential danger of QE is that it can create "easy money" for businesses since consumers are spending more and commercial loans are cheaper. In a perfect world businesses would use this increased revenue to improve their business fundamentals, like investing into R&D, improving employee wages, creating new products, etc. In reality, a lot of companies used the revenue for stock buybacks instead.

When a stock buyback happens it decreases the number of available shares and gives a payout to shareholders. The payout from the buyback usually comes in the form of an increase to the stock price or dividend. That's a sweet deal for anyone that happens to own the stock already. The decision for that comes from people at the top of the company who usually happen to own an outsized number of shares. Wahoo, party! When that stock buyback happens in a market that's already hot, stocks are more likely to become overvalued.

Another factor in stock destabilization was the speculation that took over during the strong market. Bull markets usually favor growth stocks because they can deliver higher returns than core and value stocks. Growth companies remove extra expenses like dividends to focus on reinvestment so they can keep growing. When things are going well their stock price can shoot up like a rocket.

That hotness tends to attract speculators that want to make money fast. They often buy shares of the stock without trying to understand what the intrinsic value might be. This can introduce volatility into the stock price as people buy and sell high amounts based on minor events or company rumors. Over time the speculation can cause a stock's price to diverge strongly from its intrinsic value. For example, when a certain car rental company triples in value in a single day because they came into contact with a popular electric car maker. Crazy sauce.

My best guess for why the market turned at the start of this year is that firms were moving back to more realistic valuations with the federal interest rate going back up in March. That interest rate hike causes the economy to cool down. With the speculation being high some firms may have been playing it safe. The US equities were highly overvalued though.[0]

This isn't guaranteed to be totally spot on but it's probably kind of close for the major issues.

The classic books by Benjamin Graham are a solid place to start for learning about stock investments. Bonds, commodities, derivatives, etc. are all different beasts that have their own complexities. Just learning about stocks and bonds might be a better foundation. If you really want to learn more after that then go wild.

A more advanced technique for analyzing stocks would be fundamental analysis which requires knowledge of corporate finance and accounting. At that point you might as well just become an analyst at a financial firm though...

btw this PBS Frontline documentary is pretty cool for explaining some of the recent QE problems
https://www.pbs.org/wgbh/frontline/film/the-power-of-the-fed...

[0] Search for "(cape)" in this 2022 Vanguard outlook. They weren't
alone in this overvaluation conclusion.
https://corporate.vanguard.com/content/dam/corp/research/pdf...