In the short term, emotions drive the market. But in the long term, the market is a weighing machine - it weighs what companies are worth. If investors as a group suddenly turn barish or fearful about the stock and stock prices, they can sell off those stocks which causes the price to go down. And when prices are going down, that fills a lot of investors with fear that the prices ar ging to continue going down.
#369: To answer these questions, we need a deep, tree-trunk understanding – a core, fundamental understanding – of how the stock market operates.
What, exactly, IS a stock – and how are stocks valued? What’s the difference between the Dow Jones, the S&P 500, and the Nasdaq? Why is the market a voting machine in the short-term, but a weighing machine in the long-term?
Brian Feroldi, the author of “Why Does the Stock Market Go Up?,” joins us for a Stocks 101 explainer episode.
If you’d like a deeper understanding of the world of stocks, you’ll enjoy this explainer episode.
And if you have a friend/spouse/coworker who’s said, “I need to learn more about investing,” share this episode with them.
Enjoy!
For more information, visit the show notes at https://affordanything.com/episode369
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