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Jonathan HolleyDr. Steffen GuenzelENC1102-002611/16/2015“People’s Reason to Why They Can or Cannot Invest into Stocks”The stocks market has had a roller coaster ride in 2015. From doing above average to it being the lowest since the crash in 2008/2009. During 2008/2009 stocks such as the NASDAQ and The Dow fellow below 20% which caused wide concern on whether the market would be able to recover or would the U.S enter into a depression. In 2015 in the months of June, August, and September the stock market became very volatile. Experts predicted the stock was going to take a dip but didn’t expect this to happen. The market was doing too well and the experts knew that some of the prices were unsustainable and would eventually have to come down since many of the stocks were way overpriced. They knew this was coming since The Federal Reserve was discussing if they should start raising interest rates again in the month of September of 2015. “There so called quantitative easing period is over. This is where they took 3.5 trillion dollars and put into our financial system” (Economic collapse blog). This led to me conducting research on the stock.. I after looking at the stock market for a complete of weeks this led me to investigate on why people may or may not invest their money into the stock market. This led me to my thesis Even though the stock market is very volatile at the current moment and interest rates are rising. Are Americans actually going to invest in to the stock market and what are there reason why they are or are not. The research that I have gathered caused me to split up my research into three different perspective on people with stock. The first perspective is why people should or want to invest into the stock market. The second perspective is why people can’t invest into the stock market due to lack of information or money. The final perspective on why people just don’t want to invest their money.The first perspective on why people should invest their money into the stock. People should willing to find a way to invest their money into the market. The growth of invest into the market outweighs the possible lost that may occur. The saving a person can acquire will be very beneficial when they finally going to settle down and retire. “One of the best ways to give your money a chance to grow over the long term is by investing in stocks and stock mutual funds.”(Fidelity). By some invest their money it helps them in the long run. It may not look like it at first but eventually you will see the growth of your money. Not everybody will be able to get rich quick but the long term growth you will eventually receive will help when you’re living comfortably whenever you may retire. Investors suggest the younger you invest the better you’re off with dealing with stocks. You have an advantage compared to older adults or people close to retiring because you can be more aggressive with your money and are more flexible the way you spend it in stocks. You may not have the same amount of money but you can take more risk due to you have the rest of your lifetime to make that money back. “Stocks return about an average of 10% compared to other methods such as bonds.” (Fidelity). By investing your money into the stock market it can help you pay not just for your retirement but other endeavors you may faces in your life. Investing can help you with other stuff you may need money for such paying off a house or saving up for your children or grandchildren college. There are many different news ways people can invest into stock especially the younger generation. There is a new app out their called Robinhood which is becoming popular with the younger generation. (Patrick Gillespie). When the stock market crashed in August 2015 many of its user bought stocks rather than sold them. This app is very appealing to due to the fact it offers commission-free stock trades. Apps like this and other different forms of investing helps draws the people to invest into the stock market which everybody should due to the long term growth. The younger generations investing shows that they understand the long term growth they can receive from investing into the stock market. Investor are not as worried as there where before since young investors are slowly getting more involved which they feared they wouldn’t. The 2nd perspective is on why people can’t invest their money into the stock market. The average American can’t invest their money into the stock market due to the facts that they lack the necessary funds in order to do so. The average American can barely live comfortable as it is let along invest into the stock market. “The median account balance of people who are saving for retirement is less than $60,000, according to the Federal Reserve. But 45% of working households have no retirement savings whatsoever.” (Gold). The average American household cannot afford to invest into the stock market. They do not make enough to invest their money into it. They are missing out on the long term gains from the market since they can’t invest. Pitches from investors are not working since American cannot listen to it simply because they lack the funds to even consider it yet. 53% of those who don’t own stocks says they can’t because they can’t afford to invest their money. Many people missed out on a rising bull market. Between the years of 2010-2014 the S&P 500 index had risen over 175%. That’s a lot of short and long term gained many Americans missed out on due to the lack of money. Many could’ve used that increased to help start or grow their retirement fund. A survey was taken from Bankrate in January 2015 it discovered that “38% of Americans “have enough money in their savings accounts to pay for unexpected expenses such as a $1,000 emergency room visit or a $500 car repair.”(Long) This show you how much people can invest into the stock market. This is really affecting Americans since a lot of wealth can be gained from the markets. Since they can’t afford nor have the flexibility to buy stocks they miss out on wealth and other great opportunities they can or could have gained from the market. “Less than 3% of American households have 529 college savings plans”(Bell). Which is the main reason why many students have to use financial aid and take out loans because they parents can’t afford to pay for their college. Another big reason why people cannot invest into the stock market is lack of education towards stocks. This is a very huge problem. The lack of information causes many people not to trust stock broker since they don’t understand how markets and stocks works. This caused them to miss out on the bull market which could have given them a lot of long term growth and the quickness of money they could have also gained from the market. People that lack the information causes a drift between them and people who do know how stocks works. If they had the money they could invest but since they may not have the knowledge they are way more hesitant to spend their money on stock because of the risk. To them the risk doesn’t out weight the possible gain from stocks. This is what causes the drift since they don’t understand how markets may necessarily work. ”Millennials were twice as likely as other age groups to say they've stayed out of the Millennials were twice as likely as other age groups to say they've stayed out of the stock market because they don't know enough to invest, suggesting they weren't adequately prepared by the education they'd received.” (Bell). Millennials are people who reached adulthood around the 2000’s. So this is a generations that has missed out on stocks because they don’t have the correct information to invest. They have missed much of the upside from the market than people who are older than them. The millennials not know may be due to lack of education in school on this topic or many different others reasons that could have contributed to them missing out on the stock market. By them losing the opportunity to invest due to lack of education has caused them to miss out on long term affect and the average 10% return rate they could’ve gained over the years.The third and last perspective is people who just don’t want to invest into the stock market. These people have the education and the money to invest but just choose not for many different reasons such as how the market are shaking and can’t be trustworthy. Due to the crash in 2008/2009 many people have become hesitate to invest because of what can happen at any moment unexpected. This has caused many people just walk away or never even think about investing into the stock market. “You’ve got people who have just gone through a financial crisis not that long ago, saw the market take an incredible reduction in value and saw a lot of people lose money on paper," (Bell). People seeing losing of money especially paper has caused them not even wanting to get involved into stocks. These people don’t want anything to do with stocks. They also feel like investing into certain stocks could be a Ponzi scheme hidden trying to take their hard earned money away from them. A Ponzi scheme is “A fraudulent investing scam promising high?rates of return?with little risk to investors. The?Ponzi scheme?generates returns for older investors by acquiring new investors” (Investopedia). Ponzi scheme takes money away from people who are trying to invest and put it into the pockets of the organization rather than actually investing. Ponzi makes it seem like there is little to no risk when that is actually run. Ponzi Schemes was common in the 1980’s and 1990’s. This caused many people not to be trusting and willingly invest their money into stocks. This caused many people to avoid stocks which lead to another reason why people with the money and knowledge don’t invest into markets. They don’t want to be scammed out of their money. First time investor are more at risk to falling than investors who have been investing for this into stocks for years because they know what to listen for when pitches are being presented to them and can tell the difference better than first time investors. This leads to first time investor not willingly to invest. Ponzi scheme occur less now due to new regulation and laws to help prevent this from occur but the damage has already been done and people are shying away from buy stocks.The problem of the stocks market being so volatile causes wide concern on whether people should or shouldn’t invest and why. The many different option on what people should do but all of the actions have something to do with money. Mostly lack of it or unwillingly to have the possibility of losing it. The risk to them does outweigh the reward. So people cannot invest into the stock market.Work CitedBell, Claes. "Americans Avoid Investing In Stock Market - Money Pulse | ." Americans Avoid Investing In Stock Market - Money Pulse | . Bankrate, 1 Apr. 2015. Web. 26 Oct. 2015Berman, Jillian. "Why Most Millennials Don't Invest in the Stock Market." MarketWatch. 11 Apr. 2015. Web. 23 Oct. 2015.Gold, Howard. "Here's the Real Reason Why People Don't Invest Enough in Stocks." MarketWatch. 15 Apr. 2015. Web. 26 Oct. 2015Goldberg, Ken. "The Stock Market Is Poised for a Huge Selloff -- Don't Be Fooled by the Recent Rally." TheStreet. 12 Oct. 2015. Web. 10 Oct. 2015. ................
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