November 15, 2014
What moves the stock market on a day to day basis and what moves it on a long term basis? Why should you care?
What moves the stock market on a day to day basis and what moves it on a long term basis? Why should you care?
The main thing that moves the stock market on day to day basis is speculation, buying and selling and rumors. In the long run what affects the price of stocks and makes them change is the earning, revenue and profits of the companies that are held. In the short term stocks can be more volatile and move around a lot of rumors and speculations but in the long run they will either grow if they are a good company or shrink if they are not well off. You are better off owning the stock market as a whole with no load index funds and holding for long periods of time to get those long term earning. Dont get caught up in the short term and try and buy and sell on the swings, dollar cost average your investments in to get them at the middle of the market.
You stated the case beautifully, Garrett. Let’s review.
Speculation (trying to predict the future moves of the market and the companies that collectively make it what it is) drives the daily markets and earnings (growth of those companies) and dividends end up providing the real value over time. Ignore the wild swings of speculation and invest for the long haul. Your future self will thank you for it.