What is the significance of stock market in the economy?
(Why is it important? How will your money grow through it? How does it affect everything? I hear stock market everyday. I searched the internet about it but it’s still not clear to me. A little help please. Thanks.)
Answer :
The stock market is a precursor to the economy. It usually is about 6 months ahead of the economy. If the market starts going down, the market senses that the economy is turning for the better or worse, and investors adjust, and buy or sell. Remember, investors are the owners of the big companies. eg: Ford is not owned by the Ford family. It does own about 15% of the company stock, but it is all the investors, buying the stock that owns the company.
Posted: July 29th, 2010 under US Stock Market.
Tags: significance of stock market, Stock market