Stock Market Today

（Sitting here watching the news and I asked my hubby what would happen if we didn’t have a stock market anymore?? ）

Answer ：
Companies issue stock as a relativly cheap way of raising cash. sometimes in an initial public offering or an established company may need some extra cash to grab an oppurtunity and buy an asset so they issue a ‘secondary offering’. it’s quick and relatively painless for the corporation. The stock market makes this easier as there is a ready market for such sales. they raise money to grow and sell ownership of the company. so without the stock market companies would grow more slowly, slowing the economy (during good economic times). (companies could still sell stock it would just be far more difficult.)

ok also people want to own stock because it allows them to grow their savings more quickly. I know it seems bad right now but statistics prove that the stock market is the best way to grow savings during any 20 period in the U.S. stock markets history assuming you are diversified.

so if you want eggs you might go to a grocery store….you could go to the farm but unless you live close to a farm the grocery store if far more convieniant. just like grocery stores make buying food easier the stock market makes buying stock easier. and as I demonstrated there are very good reasons to want to buy and sell stock. so if there were no stock market the people able to buy and sell stocks would become limited most likely to only people who were already rich and powerful. this would limit the ability for average people to grow their savings and would make saving for retirement more difficult.

considering our economy has grown so much because of the aid of the stock market having it completely shut down say tomorrow I think would cause a pretty big and long sustained recession (worse than one we may be currently in)(a recession is two or more quarters of negative economic growth).

now if you were to magically get rid of the stock market and it’s previous effects the result would be an economy that grows but at a much slower rate.