What is the importance of the stock market in America today?

Question

Do we need a stock market if corporations are capable of getting private investors? Purely theoretical question....

Answer 1

The stock market today is still one of the most important sources for companies to raise money. This allows businesses to go public, or raise additional capital for expansion. The liquidity that an exchange provides affords investors the ability to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as real estate.

History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on the control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'être of central banks.

Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that the counterparty could default on the transaction.

The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as employment. In this way the financial system contributes to increased prosperity.

Answer 2

Importance Of Stock Market

Answer 3

The stock markets provide financing required by large business to establish and expand their enterprises. This provides employment, a community tax base, and other auxilary benefits.

The other side of the equation is also interesting. An enormous supply of money comes from retirement plans. As the number of American within sight of retirement increases and a prosperous economy allows them to invest, they need a place to put their money. So stock market participation, direct and indirect, keeps getting larger. If there was no stock market more money would be invested into property (driving up home prices) and into commodities like precious metals (an unstable and ugly thought).

The stock market also provides a buffer to international trade which allows financial give and take that is preferable to trade wars and other hostile acts.

Answer 4

1932 is the year that roosevelt got elected which was important b/c after a line of republican presidents and the following up of the stock market crash in 1929, ppl were sick of republican presidents and in need of a new change, which is why they elected roosevelt, a democrat. the previous republican presidents such as coolidge and hoover did nothing but ease america into what is known as the great depression. coolidge was known to be one of the most laziest and unloved presidents, while hoover didnt want to get involved in citizen's personal life and didnt offer help as the ecnomy went down. he also believed that the economy would take care of itself and didnt need interference of gov. hoover also contributed to the stock market crash. he emphasized construction + automobile companys while ignoring the pleas of the suffering farming + coal industry., this ended up in an unbalanced economy and inflation and eventually america went head over heels and fell. roosevelt is the president that uplifted america from depression and he did many great things during his "first hundred days" he established many new organizations and systems such as the New Deal (1938) and the Social Security Act (1935, still used today!) he changed america forever and so 1932 is the day known as the turing point of america. hope that helped.

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Answer 5

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Answer 6

importance stock market america today

Answer 7

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Answer 8

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