Quote:
Originally Posted by GspotProductions
ok, so if a product sells well it becomes higher value & the stocks rise. So like with gold, there's still a huge demand, therefore, the stocks continue to rise. When does the fall come, when sales drop?
|
In the long term*, the price of services and goods (and that includes stocks) is determined by supply and demand. Actions like quantitative easing can affect the market in the short term. Certainly, when interest rates start to rise, fixed income yields will be more attractive and people will take some of their money out of the stock market. This will cause the demand for stocks to decline and will result in lower stock prices. People have been saying for a number of years that interest rates have to rise. I will it will happen after the American election (assuming Clinton wins).
* ... we are are all dead --JMK