explain how rise in stock market means economic progress of a country?

Answer 1

You invent a shoe with wheels.
You patent your product.
You make a few on your own and you sell them in your home town.

Everybody loves your Heelys.

You get a loan from your local bank and you sell your car and you start selling them in 5 States.

After a while you realize you need millions if you want to sell to Wal-Mart, Target, Sears and J.C. Penny in 50 States.

Your company goes public and you raise $100,000,000.00 USD in the Stock Market.

Let's asume 50,000,000 shares at $2.00 USD each.

Everybody loves your Heelys and your Company.

The stock rises to $4.00

You sell 50,000,000 more shares in a Secondary Offering this time at $4.00 each to expand your operations to Canada and Mexico.

The stock rises ro $8.00

You become a billionaire.

Now, let's stop for a moment and analize the economic progress for your country.

In the beginning you had two employees working in your garage for $5.15 each and you did not even had a car (You sold it)

Also your house was just a $100,000.00 house your greatmother left you.

As your company grows you reduce unemployment and crime.

Also your new $1,000,000 house is made with a lot of workers and you need wood, stone and other things to make it.

Your new Ferrari Enzo is also very good for Italy. (Thanks to you their companies are still in business)

If there are a lot of jobs at Italy they don't have to come here like in the Old Days.

Italy is one of the richest countries in the World.

As you can see.

Without the Stock Market. Your entire country collapses.

Answer 2

Stock Market rising indicates the rising expectation among the generla investor class and populous about the future of the economy and performance of the company there on. This also catalyses the CEO's to be more performance oriented during these times. The rising stock market also hikes up the consumption level in an economy since money is moved from speculative income to transaction income once some thresholds are reached by some. Consumption can be in Real estate, housing, sports vehicles, boats etc;.

Answer 3

Hi there. This is the deal. I would not directly link a rise in stock market to economic progress. What it does show is people's sentiment or feeling towards that economy. People invest in companies they believe are going to do well, for a certain number of reasons, either they will be busting their profit estimates or investing in an innovative product, etc.

It also needs a booming economic environment for companies to do extraordinarily well. Meaning, people need to have money available in order to buy products & services. If stock market goes up, more people are taking their excess cash (also considered a relative good indicator of financial health) and investing in companies which thrive or have potential to thrive.

On the other hand, when people take their money out of the stock market (thus selling their stock and bringing its price down), it may hint that either they have other direct and more important financial needs to cover (which may mean economy is not buoyant at that point in time), or they may have a bettter investment opportunity abroad (higher yield bonds from a forein country or foreign stock market).

Hope this helps!

Answer 4

How the f- did this get 12 stars?? The economic device follows the inventory market, not in that the inventory market determines the commercial device, yet in that the commercial forces at artwork will impact the inventory market contained in the way that the inventory market will foretell the commercial device.