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The Complexity of the Stock Market

The Intricacies of the Stock Market are influenced by a myriad of factors. Think twice before jumping headfirst into it.

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The Complexity of the Stock Market

The Stock Market exists in American life like the planets that orbit us: ever-present, yet constantly confusing. The Stock Market is often confused as being the greatest representative form of the American economy, however, it is not quite that important. While the Stock Market does help represent spending attitudes, it does not account for the behavior of the entire population and as such, should not be weighed as heavily. In fact, the stock market operates with much more volatility than a normal economy would.

The Stock Market itself is shaped by expectations. There are markets and derivatives markets (markets based on markets) that trade solely on the expected future of a firm, commodity or currency. These expectations change as rapidly as humans change their minds - which is pretty much infinite. Therefore the Stock Market in as much as it is referred to as a stable way of making money is inherently unstable as it can vacillate and change to the whims of society. The only method of controlling the Stock market to make a positive return beyond guesswork or gambling is to control society itself and its mode of thinking. This is the reason why such a large emphasis on advertising is taken by various companies - to influence common expectations to provide a more beneficial outlook of a company and its product.

Stocks are a direct representation of a company's earnings and it is in this aspect that the stock market is used as a predictor of the US economy. However, it should be noted that the stock market is not only influenced by the amalgamation of the business sector's revenues. It is reflected by consumer confidence in the economy, the disposable incomes of various consumers and of course expectations amidst a myriad of other factors. There are so many factors influencing the productivity of the Stock market that at the end of the day it could very easily be compared to gambling. In certain scenarios if an individual does their proper research into a particular company, they may be able to turn a small amount of principle into a large return over the long-run, however investing in the stock market must be diverse, long-term and requires a lot of patience and discipline.

If you're thinking about investing your hard earned money for something like a pension or long-term investment, then seriously think about the stock market. The Stock market is not a get rich quick scheme or set up, not by a long-shot and even the expert professionals in the stock market have been wrong on multiple occasions. If you're truly interested in investing in stocks then be prepared to do your research and homework into specific companies and their revenues and prepare to be resilient as the market goes down.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
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