The Importance of the Stock Market for the Economy

| April 2, 2009

  One of the more interesting modes of investment is investing in stocks. In many countries around the world, the stock markets are the main dynamical force behind national and international economies. In fact, big stock markets such as UK’s F T S E 100 or XETRA DAX of Germany or C A C 40 of France will be instrumental in controlling the economical forces in the world. Of course, in addition to these big stock markets, other stock markets such as the Shanghai Composite, or the Hang Seng index, as well as Seoul Composite will be instrumental in creating a dynamical force for the economy.

However, nothing can change the fact that perhaps the whole global economy is dependent on the biggest stock market which is the New York Stock Exchange. The N Y S E is a huge market that determines the parameters of the global economy. In principle, when the New York Stock Exchange goes down, the whole global economy will suffer and it will have a domino effect which can affect every stock market in the whole world. In fact, this is what happened in the global crisis in 2008; as when the mortgage crisis jumped into the stock market, this precipitated into a full scale stock market crisis which caused a major crisis all around the world. In no time, there was a huge economic in the global economy, as all stock markets around the world were effected immensely.

Although, the example stated above will sound as very negative, it also signifies the importance of the stock markets to the economy. Stock markets are the main dynamo of the economical forces, as a full functioning stock market will help increase the strength of the reel economy. A well functioning stock market will help create new jobs and help create funding for companies big or small. Without a functioning stock Market, it won’t be possible to have a healthy economy.

In fact, most of the economical growth of the global economy in the 20th century was mainly dependent on the stock markets all around the world. By investing in a stock market, you will be able to increase your personal financial gains by making a sound investment. In fact, many of the wealthy people on the Fortune 500 list have gained and increased their personal wealth through investing in the stock market. Also, by investing in the stock market, you will be able to become the part of your national economy and also the part of the global economy as your investment will trickle down into the real economy of the world. Hence, both for your personal gain as well as for contributing to the general economy, you should invest your money in various stocks. Of course, you can get professional advice from various sites and various professional companies for your stock market investments. Make sure that you do comprehensive research on the Internet, before you decide on your major investment.

Category: Business News

About the Author ()

Investing in the stock market today can be extremely confusing, even for professional investors. You can be extremely successful, or you could end up losing money. Keep a constant eye on your portfolio. Be aware of how your stocks are doing, as well as how favorable the stock market conditions are today.

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