Tag Archives: finance

Why the stock market goes down and why it goes up (and what you should consider)

Stock market gains chart since 2009

Since the start of the great recession in 2009, two things have happened in the stock market:

  • In the short term, events have occurred that correlate with declines in the stock market
  • In the long term, the stock market has steadily improved significantly

This leads me to two conclusions

  • Always take a longer term view of the stock market
  • The things that drive the stock market in the long term are very different than the short term drivers

The second conclusion is something that this piece tries to tackle: Gradual Improvements Go Unnoticed. It is easy to see what drives the stock market down in the short term: it is difficult to ascertain what drives the stock market up in the long term. Gradual improvements could be a contributor. Other things, like the activity of the central bank, affects this. Even how other markets in the world in the world can affect the stock market.

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