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7 Reasons Stock Exchanges Have Performed, So Well, Recently!

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Display of Stock market quotes with city scene reflect on glass | 7 Reasons Stock Exchanges Have Performed, So Well, Recently! | featured

In the past few years, we have witnessed a performance by our Stock Exchanges, which exceeded many of those in previous periods!

Although former President Donald J. Trump wanted to take credit for this phenomenon, in reality, it was probably, due to various factors, to a significant degree!

In reality, there are at least seven reasons for this performance. With that in mind, this article will attempt to briefly consider, examine, review, and discuss seven possible reasons/ causes for this and what it may mean and represent.

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7 Reasons Stock Exchanges Have Performed, So Well, Recently!

Finance, Stock Market, Stock Exchange | 7 Reasons Stock Exchanges Have Performed, So Well, Recently!

1. 2017 Tax Reform Legislation: Although politically promoted as great news and helpful to the middle – class, the greatest beneficiaries of the 2017 tax legislation have been the largest corporations and wealthiest Americans!

In fact, many believe it was, actually, Welfare for the Wealthiest! One impact was that corporations made far- more money, not predominantly because they expanded their sales results, but rather lowered their costs/ expenses by paying fewer taxes.

Supporters of this claim that when large corporations make more, it helps others, but the promised, employment boosts, didn't seem to occur significantly!

Since corporations made greater profits, their stocks appeared more appealing, and thus, many investors sought to get involved! In addition, the richest potential investors ended – up with a lot more disposable – income!

2. Artificially – low-interest rates: interest rates have been at or near historically low rates! This past few years, While it made loans more affordable, it also made Margin's cost cheaper!

In addition, it translated – to investors having fewer options because the return on fixed-income investments, such as Bonds, and bank interest, lost popularity because of the low return!

3. Cheap Money: Low rates meant Cheap Money, and many took advantage by investing. Corporations also discovered they could borrow at low rates and make themselves appear far more attractive to potential investors!

4. Manipulation/ Day Trading: Larger investors appeared to try to take advantage by using steps, manipulating prices – upward to their advantage!

Because of the ease created and the Internet, we have also witnessed far – more Day Trading, which also tends to raise the overall Stock Markets!

5. The Internet: The expansion of Discount Brokerage Houses, and reduced minimums, commissions, etc., combined, with the ease, of investing created by the enhancements from the Internet, has benefited stocks, etc.!

6. Wishful thinking: How much of the increase is based on fundamentals, and quality, and how much, on wishful thinking, hopeful reasoning, speculation, and so-called tips?

7. Strong fundamentals/ optimism: Some optimism is warranted, especially when it comes to certain stocks with quality fundamentals!

There are many reasons the price of stocks has risen! Some are deserved, and some are speculative. A wise investor proceeds with thorough consideration and awareness! Know before you invest! Weigh your approaches based on your personal comfort levels and o a risk/ reward basis!

Richard has owned businesses, been a COO, CEO, Director of Development, consultant, professionally run events, done financial planning, consulted with thousands, and conducted personal development seminars for four decades.

Rich has written three books and thousands of articles. Website: http://plan2lead.net and LIKE the Facebook page for self-help: http://facebook.com/Plan2lead

Article Source: https://EzineArticles.com/expert/Richard_Brody/492539

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