Stocks – meant to fail?

The problem with stocks is that they rise as long as there are people who invest in them. They then get bigger returns and this attracts more into it and so and so on. But this cycle eventually stops when there are almost all people involved. What happens then is that it suddenly stops rising. Therefore people start retreating from stocks because there are no longer high returns there. As they go away, prices fall and more people sell and we come to negative cycle. That is problematic. But it is how the stock market works. We can see that this is not workable system in the long run. This is why even with reformed trading things like crisis in 2008 can and will happen. And when they happen they are catastrophic. It is very concerning that none of the officials does anything about that. Because what is happening now is that everybody knows that a new crisis will eventually happen, we just don’t know when. And nobody does anything about that.

So our system is prone to fail.This is its big problem and it’ll be extremely hard to solve it. How many financial crises do we need before politicians finally take action? I am afraid that we need quite a few of them.

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