Stock Market

I do not know much about economics.

I can understand and agree on that it is not good, when unemployment rates increase. But why is such a disaster, when the stock market drops? Most people I know, do not own any stocks. What is the harm that I am missing?

Thanks.

Corporate Gambling is what The stock market is.

Like it or not (not, in my case), the world economy is built atop this house of cards, so when it comes down, so does everything else (except beer and cosmetics, apparently :slight_smile: ).

When the market drops, it also hurts consumer confidence. My portfolio lost several thousand dollars in a few days. That causes many people to rethink spending which can add to an economic slowdown.

I think it will rebound, its just a question of when.

The problem I see is anywhere you turn to find out anything about what’s going on, you see some pundit’s mouth flapping, claiming to know exactly what causes market declines or increases.

Of course, if they really were so astute, they’d be rich and retired.

AFAIK, most of the large swings in the Dow are due to computer-programmed trading triggers used to make massive changes by huge funds invested in the market, not so much the individual investors.

I have a simple example here why it would affect without any stocks: say, the insurance market crashed, then there would for sure be ppl going into say, real-eastate to try to make money there; they might start buying and selling houses and make the housing price go up which will affect everyone else. Just a thought.

Very true. I think most market panic is fueled by the media. The days of “let it ride” seem to have been pushed out by the media’s constant coverage and “the sky is falling” stories.

were going to triple dip this one!

These days market is down, so your investment is not risky these days. In the future you can earn huge profit from such stocks. So before investing always check the previous records of the stock so that you can analyze the market very easily.

One example why the stock market afects us all even if we do not partake in it is pensions. A hell of a lot of money is invested in stocks on your behalf to increase the money which you ‘invest’ in a pension. That’s why you usually get back more than you put into it.
If the stock market crashes or values drop then the money you get from your pension (and therefore the money you have to live on after retirement) is significantly less.

Economics right now is based on the selling and trading of stuff that unfortunately does not actually exist.

Agreed, its nothing that’s truly tangible but people rely on it so heavily that it might as well be.