Recent Stock Market Ups and Downs?

Question

What factors have played in the decline of the recent market swoon and subsequent recovery at least so far? Why did the Federal Reserve, recently leave rates unchanged and were there any of the CAPM (Capital Asset Pricing Model) components at 'work' here, and if so, how were they changed.

Answer 1

There is a bet on if a ressession is going to take place toward the end of this year. Some are getting out, some are buying on the dips and of course there are various retirement plans that buy no matter what.

Answer 2

CAPM - no. Markets fluctuate as many famous people have said thiugh is obvious on its face. Sub-prime lending has been the latest excuse for panic although housing was already in the tank. Fed really has no reason to take action. Inflation a little too high but economy not strong enought to have to cool down. Can always pretend there are things to analyze but better just to kepp mind on why you have to invest and do so.

Answer 3

Don't look too deep into the "causes" of a market fluctuation.

The market moves. It goes up too far to be justified financially, and then it corrects. Sometimes it goes down too far and then corrects back upwards.

All the things you mentioned are just catalysts for what's really going on - herd sentimentality. You can learn as much about practical investing from watching flocks of birds fly left and right as you can from overly complicated financial models.

Answer 4

Common tenet in stock market " market is unpredictable" you can find thousands reason after the index increase and dicrease, but actually you really don't know what cause thme exactly.

CAPM, is more related to which stock will you invest based on the risk, than to influencing market ups and down. if you do not know which factor cause the changes, you can not evaluate the risk.

Fed,hmm,... ask Mr. Bernanke

Answer 5

idk