Timeline for Stock market long term risks
Current License: CC BY-SA 3.0
11 events
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| Apr 25, 2018 at 16:58 | comment | added | JimmyJames | @user2652379 If you really want to better understand the theory of stock valuations, I would suggest starting by learning about how bonds are valued. This is a little unintuitive since most people are introduced to stocks first but the fundamental value of a bond is a much simpler idea. Once you get a handle on that, the fundamental value of a stock is much easier to get your head around. | |
| Apr 25, 2018 at 16:52 | comment | added | JimmyJames | @user2652379 The comment length answer to why the market tends to go up is that companies exist in order to make money. Stockholders are the owners and therefore they have claims to those gains. As the economy grows, so does the sum of productive work; these are equivalent. The market is a portion of that larger pie so it grows as well. Public companies tend to be more profitable than companies on average (that's why they can go public) and will usually see larger gains relative to the larger economy. | |
| Apr 25, 2018 at 2:59 | comment | added | jamesqf | @user2652379: I'm sure that I don't know enough to give a succinct explanation for why the market generally goes up. I would guess that it has a lot to do with inventing new things, or less expensive ways to make old things, as for instance all the new wealth created by computers &c. But maybe that's a question better suited to the Economics site... | |
| Apr 24, 2018 at 21:47 | comment | added | user2652379 | @jamesqf You are right. Though I hoped for the better explanations than a history based belief. Maybe that's the best we have. | |
| Apr 24, 2018 at 17:08 | comment | added | jamesqf | @user2652379: Re "...history itself can't guarantee the future", in case you haven't noticed, this is real life. There aren't any guarantees. Some nutcase in a van could drive down the sidewalk you happen to be walking on, and there go all your investment plans. You just have to go with the best odds you can. | |
| Apr 24, 2018 at 15:24 | comment | added | cHao | @user2652379: Natural selection works in markets too. Companies can't lose money forever -- the unsuccessful ones either die, or get bought out and become part of a company that knows how to turn a profit. So in the end, what's left are companies with a record of increasing value. | |
| Apr 24, 2018 at 12:24 | comment | added | user2652379 | Historically, I agree that they go up in the long-term. But what's the cause? Most answers are just using market history without mentioning this. I'm concerned because history itself can't guarantee the future. What do you think? | |
| Apr 24, 2018 at 11:46 | vote | accept | ispiro | ||
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| Apr 23, 2018 at 19:25 | history | edited | JohnFx♦ | CC BY-SA 3.0 |
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| Apr 23, 2018 at 18:53 | comment | added | jpaugh | Worth mentioning (and, I don't have a source handy), that withdrawing 3.5% of a retirement account through the Great Depression would have been safe, in the sense that the investment would have survived the depression, and continued to grow. | |
| Apr 23, 2018 at 13:55 | history | answered | Pete B. | CC BY-SA 3.0 |