When the stock market rises, it is because you are investing money in the stock of an American company- lets say you are investing in Joe the Plumbers' business, you are making a vote of confidence in Joe...... you are basically saying... hey Joe.... I think you make a great product or offer a great service, I believe in the productivity of your employees, and you make that product or perform that service so well that I think a lot of people will call you for your services, so I can tell that you will see a profit in your business.... so I am going to buy stock to show you how much I believe in your business..... and when Joe makes money, you, as an investor, will make money too.
When the stock market falls, exactly the opposite is happening.... you are selling the stock you already own in Joe's business. You changed your mind about the product that he sell, suddenly his service is not as good as you thought it was, or maybe other people aren't calling Joe anymore, and suddenly Joe's business is not making a profit..... and when the business does not make a profit, you, as an investor, do not make a profit either.
The rise and fall of stocks are a barometer of what the future holds for American business.
Did you notice the stock market made a huge gain yesterday of about 900 points? Did you notice when it started turning around? It was about 4:00 p.m.
What happened about 4:00 p.m. yesterday to make the stock market suddenly skyrocket 900 points (the second largest gain in history)?
I Certainly don't know everything that happened about 4:00 p.m. yesterday.... but I do know one thing that happened....
At 4:00 p.m., a new poll was released showing that Obama was losing his lead over John McCain and was now only ahead by two very small points....and suddenly the stock market shot up like a rocket.
Remember... the stock market only rises when you think that Joe (American business in general) will be have productive employees and be able to sell their products to others to make a profit, and the stock market falls when you think that the company will be unable to make a profit.
The stock market going through the roof after news that John McCain is pulling up from behind to become President....
Which Presidential Candidate will be better for the economy?