Progressive Policies May Hurt the Stock Market. That’s Not a Bad Thing.
August 13, 2019 at 4:09 PM - Views: 78 #110253sonofspy777Participant
Last week, we saw the media terrified over a plunge in the stock market following an escalation of Donald Trump’s trade war with China. There are good reasons to be concerned about Trump’s ill-defined trade war and reality TV tactics, but the plunge in the stock market is not one of them.
While the idea that the stock market is a measure of the health of the economy permeates news reporting and popular understanding, it has no basis in economics. The stock market is a measure of the expectations of future profits of companies that are listed in the exchange. It is only coincidental when it provides information about the health of the economy. It is important that the public understand this distinction as the 2020 election draws closer.
The basic logic here is simple. The price of Microsoft, Boeing or Pfizer stock is not going to rise because workers are getting pay increases or they can take longer vacations. The price of these companies’ stocks will rise if investors believe that events will cause their profits to be higher. That’s the end of the story.
Bernie figured he could do more good ALIVE,
than dead in a small plane "accident".
I think he's right.
August 13, 2019 at 5:06 PM #110328xyzseParticipant
Lately, for me, investments and a brokerage account have a much better outcome than a Savings Account. It carries more risk, but with bank accounts, that is a guaranteed loss over time.
With how in GWBush’s tenure, banking and savings for regular folk were destroyed. Back, even just in the 90’s, savings rate was at 5% or more. Play the game right, and you had accounts that would give you over 10% return.
For a while there, even up till Obama, bank savings account would net you less than 1% for savings. Nowadays, the highest savings rate is at 2.2% or something low like that. Considering bank accounts (even with PNC) which would sometimes charge you a monthly fee(I know someone who gets charged $7 a month). Keeping your money there means going broke slowly.
So yeah, for any one who has a life-expectancy of more than a decade, I think it is best to get in to Dividend paying stocks now. There are other money-managed accounts that would work, but for the most part, keeping your money in a regular bank checking and savings account makes no sense to me.
Sorry for the huge tangent, but my point really is… Even if you put money on stocks right now, as long as you pick companies that pay you Dividends, and won’t go out of business, you’ll still get more of a return than what you place on a bank. The value of the stock may rise or fall, but if you’re playing the long game of years, then it shouldn’t matter too much.
The only ones that really get hurt, are the rich folk who buy and sell all the time. I only buy and hold. They play around too much, that they wouldn’t allow the stocks to just go out of business to begin with.
- Stocks going down, especially now only really affects the rich. It does not really mean as much when it comes to general businesses and work, since the stock market is very speculative. Unlike before, the value is somehow divorced from reality.
- For someone small-time like me. Placing savings on stock is relatively low-risk. Keeping money in the bank is a guaranteed loss. So, buying dividend paying stock at a low price during a crash is a valid idea. All you have to do is hold on to it, even if the market fluctuates up and down. As long as they keep paying dividends and not go out of business, it still gives you a better rate of return than a bank’s regular savings account. Granted, you have to be young enough to have a minimum of two decades on this.
- Lastly, no matter what Progressive Policies are placed, the stock market will bounce back, and adjust to the new normal. Rich folk will still try to exploit the system, and figure out what else they can get away with. Bottom-line is, the government/ruling-class makes it too easy for them, and screws everyone else.
Sorry, I got lengthy.
August 14, 2019 at 9:43 AM #111217ArtfromArkParticipant
I’m sorry, but I disagree strongly about buying stocks. My mom inherited several stocks from my grandfather, and they were dividend-paying stocks in their day. Yet, a lot of those stocks crashed, even though they were considered “safe” companies– Tenneco, GMC, GE, Burlington Industries are what I can remember offhand. My mom lost a lot of money thinking she should hold on to those “safe” companies, because they were paying dividends. At least she sold Tenneco at $49 before it crashed to $5. And I myself was burned very badly with stocks back in the nineties. On top of that, what is good for Wall Street is often bad for Main Street. Wall Street doesn’t give a crap if Amazon or Walmart drives yet another mom-and-pop shop out of business, because Amazon and Walmart are listed, and Mom-and-Pop isn’t. And buying into Wall Street makes it all that much harder to bring about real change, like transitioning to renewable energy.
August 14, 2019 at 9:55 AM #111218
August 14, 2019 at 3:00 PM #111481xyzseParticipant
No worries, I can understand the disagreement. Besides, that is just my experience any way. Comparing a savings account from a bank to getting a return from dividends. Not what works for me, works for others, and I know that it is a risk.
Also, I only buy stocks during a catastrophic crash/downturn so the last time I had a buying spree was back when Bush was getting out of office and Obama was coming in. There was a huge crash then, and that is the only time I buy. I went for Pharmaceuticals and Banks, since I considered them safer bets. Pharma, especially the big named ones will always be around, and just like banks, if they are bought out, chances are, the stock you have gets converted to the company that acquires them.
I use other investment vehicles in general(Mutual Funds, Annuities, etc.), but when I play with stocks, it is my “Vice” money. Where, since I don’t drink, smoke, gamble(things that my father did), what I thought is equivalent to that is what I designated as play. So that’s why I don’t feel much risk on it, while in comparison to a savings account in a bank, with the fees they charge a month, it costs far more than the small percentage they give you each month.
Point of my post really was, is that since Stocks are divorced from reality, it doesn’t affect most people to begin with, and that no matter what Progressive Policies are adopted, stocks will bounce back and adapt to the new normal.
August 13, 2019 at 11:49 PM #110787YanathParticipant
The IPCC strongly recommends (to put it mildly) “radical transformation” to global energy, economic and agricultural systems. When they say this, they don’t mean we need to tweak market ‘economics’ to make it more equitable, and that billionaires should pay higher taxes. They mean we need to abandon the lunacy entirely, in favor of systems that are less destructive, wasteful and unjust, and which are guided by a rational ideology and organized by the principles of math and science. In short what is needed is a radical transformation to human society itself.
August 13, 2019 at 11:56 PM #110793peacecorpsParticipant
It could happen but the stock market crashed under Herbert Hoover and George Bush, hardly progressives, and soared under FDR, a true progressive.
Enriching the middle class pays economic benefits that trickle-down conservatives will never understand.
They are called 'human' rights not "if politicians do not feel threatened" rights. Many politicians see national sovereignty/security as more important because they protect their power and wealth. Human rights often do just the opposite.
National issues (slavery/racism, income inequality, pandemics and pathetic health care, weak unions) are not solved with more states' rights. Global problems (climate change, migration, trade, war, pandemics) are not resolved with more national sovereignty.
August 14, 2019 at 12:01 AM #110797Cold Mountain TrailParticipant
under fdr because it had already crashed hard, and in the later years because we were militarizing in preparation for the war.
August 14, 2019 at 7:08 AM #1111073fingerbrownParticipant
I’ll listen to Dean Baker before any of the wall street whores on CNBC.
All governments lie to their citizen's, but only Americans believe theirs.
August 14, 2019 at 10:24 AM #111269Hobbit709Participant
Used to be when unemployment went up, the stock market went down. Now it’s the opposite. The massive trading now is based on speculation that the share price will go up, not on the amount of dividends those shares pay.
I don't waste my time teaching pigs to sing.
- You must be logged in to reply to this topic.