Stock Market Difficulties

Stock market issues Ben Rooney's article "There is good news for stocks" is an article about the internal organization of the stock market. The author says that investors can remain calmly at first if the reader will not have news in the economic field. This week, both the Dow Jones Industrial Average Price Index and the Standard & Poor's 500 Index closed, and the Naskad was high for four consecutive weeks. For a long time, the Fed has become a focus of attention when people have found the possibility of reducing $ 85 billion a month.

The world economic outlook continues, long-term weakness In recent years, the global economy has experienced intense corporate profits and sharp decline in capital investment, a decline in consumption in the stock market, the severity of the financial services industry, the tightening of the credit market, Sluggishness, inflation and concerns about deflation are decreasing. Expenditure and various other economic difficulties. According to industry estimates, the global economy is still expected to remain weak and opaque in 2013. The recession in the euro area is expected to continue until the end of 2013

Stock market volatility (risk) by two main reasons. First, since stocks reflect the needs of consumers, revenues are related to earnings. Issuers issue periodic financial statements that disclose revenue and investors trade shares of the company based on the findings. Providing products and services that companies can not satisfy means that consumers' demand is reduced and as a result corporate earnings are reduced. Since stock pricing is related to revenue, this means that the fair market value of the company's stock will decline.

Future revenue is the reality that the stock market price is based on. However, investors may not agree on where the proceeds are going, so some think that the stock is cheap but others think the stock is expensive. As the news aired, some investors changed their mind, which led to fluctuations in stock prices. We can not determine future revenue, so we can not confirm whether there is a bubble in the market before things happen. But Nobel Laureate winner Vernon Smith proved 30 years ago that bubbles often appear in an experimental stock market environment, even if we know the future profit so that we can calculate the correct value.