What does it mean when stocks are down and why do they matter to we the people?

Question

What does it mean when stocks are down and why do they matter to we the people?

Answer 1

it depends on if you are in a long or short position

Answer 2

It only matters if you are invested long in the market, is the simple answer. The more involved answer is the stock market of LEADS the economy not the other way around. So, if the market is in a downtrend, not just one day, it is likely signalling difficult times ahead for the economy, which does affect all of us, regardless if you are invested in the stock market.

Answer 3

If large companies are doing badly, their stocks will be worth less. This is a sign that employers will freeze hiring, and even start laying people off.

On the other hand, if you own stocks, it is a good time to buy them when they are low. So that when they eventually get to be more valuable, you can sell them.

Since many people have a retirement plan invested in the stock market, it also means that their retirement nest egg is worth less. This is why older people should have safer investments like bonds.

Answer 4

Stocks go up and down all the time.  The media like to play up stories of stock prices dropping because it generates attention and sales.  Most good investors like Jim Rogers and George Soros don't give a hoot about stock fluctuations unless they're doing tricky stuff like trying to "short" positions etc.

The only thing that should matter is the real value of the companies.  Even then, that's not an indicator of the overall economy, and even the overall economy isn't an indicator of anything that necessarily matters to one person.  There's a lot of creative loosy-goosy stuff that happens between accounting firm, media press release, and the info that the Fed decides to release - that we're not really getting the full picture anyway on the "real" state of the economy - the US dollar is a case in point.

MoneyEnergy

http://www.getmoneyenergy.com

Answer 5

When stocks are down, companies are down, when companies are down, jobs are lost, when jobs are lost, kids go hungry, when kids go hungry, the hungry steal and theive. Good day.