The stock market specifically is a very specific subcategory of the general financial market. If we’re talking about the market in general, it’s very relevant for the average person. The general market is made up of many different sections, from bonds to real estate, commodities, foreign exchange (Forex), stocks and the list goes on. And if you have a bank account, your money is invested in the market whether you like it or not. That’s the reason you receive interest from a bank. Join David Grasso as he dives deeper into this financial hole with Erin Elmore of Turning Point USA and Hannah Chatalas of Global Situation Room.
Who’s interested in the stock market?
Elmore states that in 2020, 55% of Americans say they own stock, which is less than 2008’s 62%. Elmore thinks that this difference has to do with age; Millennials tend to invest in real estate more than stocks. However, that doesn’t mean the stock market is irrelevant. It can affect you indirectly. It’s also used as a general indicator of how the economy is doing. When there is specific good news, the stock market will usually — not always — move in a positive way and vise versa.
Chatalas digs deeper and asks “Does it matter?” The answer depends on who you are. For wealthy people, it does matter more because their potential growth is much greater than the average American. But many Americans in today’s economy are in financial distress. When an individual loses their job and can’t pay rent, the last thing on their mind is how the S&P 500 is doing. So, for some people, the stock market matters less.
How should you go about investing in the stock market?
Both Chatalas and Elmore agree that financial literacy is most important on every level. When deciding to invest in stocks, it’s crucial to understand all of the different market dynamics as well as people’s mindsets. In addition, we have more access to the stock market now than ever before, with all these non-commissioned apps popping up everywhere, such as Robin Hood and Webull. However, in order for these opportunities to be effective, it is important to educate yourself in the stock market and in financial literacy.