In a way these finding also means that the industry that were severely impacted by the illness like restaurants, travel and hospital only make up a relatively small portion of the overall index or really another words about 25%, that means that even though 25% of the overall SnP 500 got hit really hard, the remaining 75% is doing well or exceptionally well, now besides that we can’t deny that the federal Reserve have also had an impact on the stock market growth as well.
They said they’ll do whatever it takes to prevent our entire economy from collapsing and that’s given investors a lot of confidence to go and jump back into the market. So much so that it was found that it was commonly used as a stimulus check across all income brackets was investing back into the stock market. That’s right stock trading increased 90% following the week after giving the sinus check for the income bracket between 35 and 75k dollars a year.
Stock brokers also saw major boost in business as well, Charles Schwab reported a major amount of sign-ups over 609,000 of then to be exact, and another stock app saw a 300% increase in trading volume. Now from my anecdotal experience I could tell you when the stock market fell, pretty much everything everybody talked about, I would walk in my real estate office and we would talk stock for hours, I would even have multiples group text giving with my friends about the stock markets, this is in finance topics dominates the headline throughout the crisis so I think it’s reasonable to expect that all of a sudden people found a new appreciation for investing and saving money. Combine that with several monuments stock markets drops really low interest rates and a larger stimulus ever and people are just going to want to learn more about investing especially Inna bargained price, however there is a word if caution when it comes to all of this.
just be aware that investing right now is going to come with extreme volatility meaning, that as soon as some good news comes out, people are going to be rushing into the stock market boosting prices because they don’t want to be left out, but at the same time if bad news comes out like we would inevitably had, that’s going to cost people to panic and pull out of the stock market and probably going to end up losing money.
So it’s really vital now to invest for the long term and as Warren buffet says don’t go and buy individual stocks, instead go and invest in index funds for the majority of the people out there, a simple broad index fund is going to be giving you the best option long term this means, instead of going and buying individual stocks, you can invest in all of then in one fund at the exact same time, and the benefit of doing this is that if a few of those companies don’t do well, you have a whole bunch of others that can more than make up for it like FAT MANG.
Likewise if a few of them to well, you’ll get to their that benefit on a small scale consistently over the long term it was found that the indexes fuhfd even out performed the most advanced hedge fund managers m, so that’s a Huge incentive to go ahead and do this.
And when investing, invest with the expectation that 10-20years from now the price is going to be much higher than it is today, maybe you can look back at this and have list money or maybe you look back at this and you look like a genius buy no matter what happens you should invest consistently to build long term, I basically just put the money in jail for the next 20 years and whatever it does until then does not matter to me.
Of course this also cones with the disclosure that the stock market isn’t the economy, but what we are happening day to day right might not necessarily reflect the price of the stock market for better or for worst.
So instead of trying to predict whether it would happen short term with the stick market, it’s usually better to Just join it, invest long term and even if you see drop in your account, as long as you’re diversified enough you should come out of it the other end okay.
So remember in the short term anything can happen who knew stimulus plan is pretty much coming up even other day at this point one of which includes $450 a week Saba incentive to return back to work, with the end of the unemployment benefit comes July 31st which we had no idea is going to happen other words and we have the federal Reserve doing whatever it takes to keep us afloat and all this news is going to play a role on how the stock market performs and it be honest we have no idea what’s going to happen.
I pretty much guarantee back in March, almost no one would have predicted that we would be here today at almost back at 3,00 abs who knows in the short term maybe we’ll just continue to climb even Higher, or we might end up going back down for the long term.
I’m still very much optimistic and the same strategies that worked a few years ago,are still in place and would still work today.
But do keep in mind that one of the reason the stock market is going up so Much is because it’s driven by few companies that happen to be doing exceptionally well those are the ones that are doing a large portion of the market right now and when others are down they’re busy compensating for it.
Just imagine companies that are at its peak, at a time when other companies are crying, so that’s what you need and all the heads up you’ll get on the stock market.