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Originally posted by lynxpilot
MSM is touting the stock market increase of late to be indicative of a recovery. I'm no MBA, but my memory is not so short that I don't remember how leading up to New Year's Day of 2000, things looked peachy and the market was booming. A few days later, anybody whose retirement fund was stock-market based, especially NASDAQ and other high risk stocks, was back to net negative investment.
I've never thought the current stock market was a viable indicator of the economic health of the country. Am I just being ignorant?
Originally posted by lynxpilot
I know we have swings up and down, and traditionally they haven't meant the end of the world, but I'm perplexed as to why a fed chairman, president, and minions would try to pass this charade off as something to be optimistic about. For the last 2 or 3 months, they're trying to say housing is bouncing back, and CNN or somebody had some blather a day or two ago about jobs, pay, and unemployment all being on the move to better.
I have absolutely no trust in the stock market. I know a lot of folks (Soros and others) have made fortunes from it, but they're also at the wheel of where the real economy goes, as drivers, so they have legal insider info.
Somebody was predicting that the market would be in the 16K range within the next year or so, and I don't doubt that it may actually do that, but I suspect that anybody that rides that wave up is going to hit the beach hard.
Originally posted by solomons path
Actually it was 2007 when the market took a dump . . . not 2000. Things were just fine and rosey for the first 7 years of the 2000's. And by 2010, not only was it back, but had gained 12% on top of that. (27% down to 39% up the next two years). So . . . your memory is a little "fuzzy" on that.
The problem was all the doom and gloomers pulled all their money out (what was left) because of fears that they would lose more. If they would have just relaxed and left it alone . . . Their retirement accts would be booming right now . . . Whether you want to blame the panicky nature of man or relying on emotion to manage their money . . . people messed up by doing that. No actual financial advisors were telling people to pull all their money out . .. except those trying to sell doom books or precious metals.
That said, the market shows investor confidence in the companies that are traded. The Dow and S&P show a index of the largest traded companies over a range of industries. It is a good indicator of what the largest scale investors are doing, but doesn't directly equate to the health of the economy.
Problem in this country is everyone (general public) thinks they know what they are talking about when it comes to the movements and levels, yet they usually don't know the first thing about personal finance. If they did they wouldn't be poor and bitching all the time . . .
For direction of the economy, look at what are considered "leading economic indicators" . . . these allow predictions on the economy because they change before the actual economy goes in that direction.
Economic Indicators
However, stock market can turn on a whim . . . and our debt is a serious problem. A lot of people are also predicting some sort of equity bubble, but prices are constantly going through corrections (said to be built in). So if the leading indicators move in a direction, the market will adjust before it hits the wallet of the public.edit on 3/14/13 by solomons path because: (no reason given)