stock market

How does the stock market affect the economy

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The stock market can have a significant impact on the economy in several ways. Here are some of the key effects: 1.Earnings for Businesses – Lower stock prices can lead to decreased net wealth for individuals, causing them to tighten their purse strings. This reduced consumer spending can negatively affect businesses, leading to lower profits. – When businesses face a slowdown in consumer spending and reduced profitability, they may find it challenging to expand and grow. This stagnation in business …

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Crash or Correction?

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The last few weeks have been a tumultuous time for share markets. We have seen large declines in share prices but how do you know if a share market is crashing or having a correction? Definition of Crash and Correction A stock market crash is a sudden drop in share prices caused by fear and panic. A crash occurs when the market falls more than 10% in one day. A market correction is normal for share markets and this occurs …

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What causes stock prices to move?

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There are many reasons why a stock price may move. Often a rise or decline in the share price cannot make sense to an investor and share price reactions to certain events can seem counterintuitive. Here we discuss the main reasons for share price movements. Company Reporting As we have seen during the reporting season, stock prices have moved significantly once a company has released its results. Most of time, if the market is expecting better numbers than what was …

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5 Ways the Stock Market Affects the Economy

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We have previously written on the effects of the housing market and the economy but in this article, we explore the affects of a stock market on the economy. Even if individuals do not have share portfolios, a crash in the stock market may still affect them. 1.Lower stock prices means less earnings for businesses Businesses will feel the impact of lowering stock market values. When individual‘s net wealth values decrease due to the lowering of value of the stock …

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Why investing is not like gambling

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People unfamiliar with share investing often compare it to gambling at the casino or the track. At first glance, it can seem like the share market is like a casino where you place bets on a stock and hope that it does go up. However in this article we outline reasons why there is a distinct differences between the two. There is a higher probability of creating wealth by saving a little each month and putting it in the stock …

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