Why does the stock market affect the economy?

Why is the stock market rallying when the economy is so bad?

Why does the stock market affect the economy?

Confusion is one of the worst mental and emotional tortures.  This article is meant to resolve the confusion of how bad the economy can be and the stock markets can be at an all-time high.

 I have been trading in the stock markets for 13 years.  Using insights gained from life's purpose, I have found tricks, and ways to succeed. 

Let us begin by explaining how the value and movement of the stock market is determined.

Markets are a weighted average of a selected and very small number of companies.  

While there are thousands of public companies, the three main US markets are listed on companies that do not represent objective reality.

The Dow Jones is based on 30 companies, uses the S&P and NASDAQ 100 companies at 500 companies.  

Although the Dow comprises only 30 of the more than 5,000 US stocks, the combined value of the 30 companies is about 25 percent of the total value of all US stocks.

They use the weighted average of only a select few companies to determine the value of the market.

This means that if Apple goes up significantly in one day, while most other companies in the NASDAQ move down, the NASDAQ will go up, because Apple is such a big company that it outshines all others.

Apple costs more than $ 2 trillion.  If the combined value of all other 99 companies is just under $ 1 trillion for example, Apple alone affects market movement and price twice as much as the combined 99.  

Why is the stock market going up today


Similarly, if every company in the NASDAQ goes up, but Apple goes down, the market will go down.

'Votes' are given to larger companies than smaller companies.

In August 2020, markets are at an all-time high, however, more than 60% of public companies are still at significant losses.

The stock markets have nothing to do with the real world market, only a select few.

My next article title;  "Based on Stock Trading Emotion" will explain another marketplace that leads people to poor investment decisions, and shows you how to make money using the method I developed and was 95% successful.

People read about the markets going up, so they buy stock in different companies, and they go down the stock, and they get confused.  

'If the markets are at all-time highs, then why are my stocks declining, or why not back?'

Why does the stock market affect the economy?

Because it is not a market that is up or down, but only a handful of companies.  Let's use the analogy of a shopping mall.  

The mall has a large grocery store, they are always busy, but small independent stores have no business and no money.

The mall owner says that the mall has the highest sales of all time, as only one tenant is counted, which is a grocery store, ignoring smaller shops.

As he was speaking, the stock markets crashed as investors sold all of their shares to those and other companies. 


This was at the bottom of the market crash, when they finished their TV rent, shortly after the stock started recovering.

Nevertheless, to protect people from such manipulation of markets, the government regulator SEC has done nothing about it. 

Again, the 1% Super Rich do away with destroying the lives of those little ones who were all sold out or forced to sell their shares at a significant loss due to margin calls or panic, while the market His TV crashed during the rant.

This is the type of phenomenon that makes people mistrust the stock market. But we should not give up so easily.

The lesson I want you to go through is, the business world is based on greed, but, you already know. 

The real lesson about the stock market is; Accept the reality and find ways they are trying to deceive you, then follow along with their tricks.

Don't be angry that they are liars and cheaters, that's your definition of what they do. They call it smart business. 

Right and wrong are all subject to subjective opinion. In this world, the rich are of the opinion that they form the basis of laws and regulations. So play with their rules and you will win.

But please, try to be a better person with the money you make than the people who control the system.


Next Post »

Featured post

How to invest in gold for beginners in Kannada | ಚಿನ್ನದ ವ್ಯಾಪಾರಕ್ಕೆ ಐದು ಮಾರ್ಗಗಳು

ಕನ್ನಡದಲ್ಲಿ ಆರಂಭಿಕರಿಗಾಗಿ ಚಿನ್ನದಲ್ಲಿ ಹೂಡಿಕೆ ಮಾಡುವುದು ಹೇಗೆ ? ಚಿನ್ನದ ವ್ಯಾಪಾರಕ್ಕೆ ಐದು ಮಾರ್ಗಗಳು ಹಣಕಾಸು ಮಾರುಕಟ್ಟೆಗಳು ಹೂಡಿಕೆದಾರರಿಗೆ ಹಲವಾರು ಹಣ...