Question by Miss Yahoo: How does the housing market place have an effect on the stock market so significantly?
I heard that the housing industry getting minimal in revenue and with the forclousure market crashing, it is affecting investors so significantly that they are moving funds out of equities (stocks) and investing a lot more in safer investments. Thats why the stock industry has been down so significantly in the past week.
How does this happen? I was reading about it, but I didn’t really realize. Are traders pulling out their stocks from large lenders? How specifically does it impact the stock market? I require support comprehending it in regular terms that make sense.
Please advise, thank you!!
Reply by Brian K
You might get a lot a lot more technical and professional solutions on here, but one particular of the primary problems is that the stock market surged way also high to commence with. The fundamentals have not changed that significantly in the final 2 years, but for some stupid cause the stocks ran up from below 12,000 to above 14,000. They got way overvalued, and this “drop” is truly far more of a correction back down to exactly where their values truly should be. It surged from 13,000 to 14,000 really, really swiftly for no great fundamentals explanation.
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