HOw does the 300 point loss for the DOW affect people in general?

Question

I saw it on breaking news cnn.com. Can someone explain to me how it affects us as citizens, or do I say, "whatever".?

Answer 1

The DOW actually measures the average value of the 30 stocks most widely representative of American economics; the ones that are most traded, bought, or sold.  A large number of smaller stocks actually trickle down from these 30, or belong to similar industries, which means if you see one move, others like it will move similarly.  A large drop in the number means that in general, corporations are losing money, which can translate into declining sales and revenue, and in the long run, people losing their jobs, houses, and companies going bankrupt.  A single large change in a day probably isn't anything to worry about, but seeing a consistent downward trend in the numbers might mean you need to start worrying about your own job security.  

The number can hit you particularly hard if you have money in accounts that are based in whole or part on the value of the stock markets.  Examples of these are retirement accounts such as 401(k), IRAs, or SEPP.  An overal drop in the market can mean your accounts lose considerable value.  The classic extreme example is when ENRON went bust through the scandal, their stock plunged to zero and all their employees' retirement accounts were wiped out.

So if you have a job, it's in your interests to watch for trends, even if you have no retirement savings.

Answer 2

If you've got money in a retirement plan, like a 401K, it may reduce the value of your account.  Other than that, not too much impact on your daily life.

Answer 3

It affects those of us with pensions invested in the market. It affects the overall economy and our jobs.

Answer 4

If you have money or stocks in the market, their value decreases. This is tough in the short run but in the long haul everything should be just fine.

Answer 5

prices will be higher, and a few more people will lose their jobs, I hope you are not one of them.