That is what gives it value to the purchases of the stock.
It is purchased because the buyer expects to earn more from it than they paid, and that they likely can pass it on later.
The value of stocks is certainly connected to real value, and it is one of humanity’s greatest inventions.
However, the majority of Americans do not associate stocks with voting rights. Only a slim minority of Americans own stocks to begin with!
Most laymen investors or readers believe that the stock market is an indication of how well our economy is doing — which it’s not.
The value of the stock market, like you said, is based on the buyers expectations. Which is what I said: the market is controlled by institutions and money managers. Those are the majority of your buyers.
Earners of $100,000/year or more have 5x the amount in holdings as compared to those earning $99,000 or below.
Only 14% of Americans are invested in individual stocks outside of a 401k program.
401k assets only amount to 17% of the total US retirement.
None of these numbers tell a great story because Americans are not saving for retirement. If they are, they’re barely saving a years worth of their salary.
I wish I could convince people to spend only half of what they spend on weed and alcohol on buying stocks - it would be of great benefit to the masses. How can we show them the benefits?
>the stock market has little correlation to reality... It fluctuates based on personal sentiment from institutions and money managers
>a slim minority of Americans own stocks to begin with...
>most laymen investors or readers believe that the stock market is an indication of how well our economy is doing — which it’s not.
And therefore an improved stock market does not equate to an improved 'economy', and therefore it is incorrect to credit Donald Trump with an improved economy purely because tax cuts to the rich may have bumped the stock market. What on Earth does your comment have to do with that?