Seven reasons why stock exchanges have recently performed so well!
There are at least 7 factors that contributed to this performance. In light of this, this essay will seek to quickly evaluate, examine, assess, and debate seven potential causes or reasons for this as well as what it might indicate and suggest.
The largest corporations and the wealthiest Americans have benefited the most from the 2017 tax law, despite it being publicly marketed as good news and helpful to the middle class. Many people truly think it was welfare for the wealthiest, in reality! One outcome was that businesses gained significantly more money, however not primarily as a result of increased sales but rather as a result of fewer costs and expenses due to lower taxes. Supporters contend that when huge firms generate more revenue,
2. Interest rates that are artificially low: For the past few years, interest rates have been at or very close to historically low levels! While it reduced the cost of borrowing, it also decreased the price of margin! Additionally, it meant that investors had fewer options because fixed-income investments like bonds and bank interest lost favor as a result of the low return!
3. Cheap Money: Because rates were low, investing became quite popular. Businesses also learned that they could borrow money at cheap interest rates to boost their appeal to potential investors.
4. Manipulation/ Day Trading: Larger investors appeared to try to take advantage, by using steps, manipulating, prices – upward, to their advantage! Because of the ease, created, because of the Internet, we have also witnessed, far – more, Day Trading, which, also, tends, to raise the overall, Stock Markets!
5. The Internet: The expansion of Discount Brokerage Houses, and reduced minimums, commissions, etc, combined, with, the ease, of investing, created by the enhancements, from the Internet, has benefit stocks, etc!
6. Wishful thinking: How much of the increase, is based, on fundamentals, and quality, and, how much, on wishful thinking, hopeful reasoning, speculation, and so – called, tips?
7. Strong fundamentals/ optimism: Some of the optimism is warranted, especially, when it comes to certain stocks, with quality fundamentals!
There are many reasons, the price of stocks, have risen! Some are deserved, some are speculative. A wise investor proceeds, with, thorough consideration, and awareness! Know, before you invest! Weigh your approaches, based on your personal comfort levels, a
nd, on a, risk/ reward basis!
