How is is possible for the stock market to fall?
(If you can only sell when there is a buyer then how can the market fall? If I had 10 shares and you wanted 5, I sell 5 now i only have 5 but you now have 5 so the market still has 10…right?)
Answer:
the market does not necessarily rise or fall based on number of shares, but current sale price of shares.
for example, if i buy a case of pepsi and try to sell it by the can on a street corner, i might get 50 cents each, but if i sell them at a football game, i could get a dollar. it does not really matter how many cans i have, but the situation that i am in.
the same is true right now in the market. people are buying and selling based on how much they believe the product is worth. you have seen it fall because most poeple do not think the stocks are worth what they used to be. “the market” is just the price of everyone buying and selling a certain stock.
Posted: August 9th, 2010 under US Stock Market.
Tags: stock market to fall