The Stock Market and the Economy: What We Have Learned About Them
1) One Bad Day on Wall Street can cause people to claim that the entire economy to fall right into the next Great Depression. Conditions in the world have changed a long time since the Great Depression. Granted, that is not to minimize the sufferings of people due to the economy and the harsh conditions.2) One great day on Wall Street will mean that happy days are here again. In an unrelated note, people are in fact fickle. If you actually look at the economy, the performance of the stock market is only a slight picture of what happened to us. Reckless spending, giving everyone hand outs and helping out everyone, and spending money in a reckless rate. Not just Obama, not just Bush, not just Clinton, just not the other Bush, but generations and generations.
3)Faulty and slanted economic data can cause the stock market to sour to high levels. Or fall to low levels. The jobs data just came out as I wrote this, and Wall Street has had a slight bounce off of the jobs report. Really anything to do with jobs and unemployment these days, is really no indicator of how the economy works. Especially the unemployment rate. I've gone over this many times, but the unemployment rate is the amount of people collecting unemployment, not the amount of people out of the job.
4) Stock trading is a game of hot potato. Investors is a term that really is only token these days. In the past, investors have been in it for the long haul. Sometimes to their own doom, but sometimes they kept in when others have long since bailed out. It is a big picture sort of thing with the stock market, with the economy, with really anything else. Most "investors" these days let the stock market manipulate them as opposed to the other market.
5)You'd swear that the stock market was only made up of a handful of companies. Because that is all that is being talked about. You know the rises of Apple, Microsoft, many car dealerships, pretty much the same old suspects. If you follow the stock market and the goings of the economy with any regularity, you notice many big companies prop up even if there are hundreds more. But certain companies given their high volume of trading and just name recognition from novice stock traders who don't know any better.
6)Everything you know you about the stock market and the economy is wrong. Know that when you think they know all of the answers, they keep changing the questions.
