Why does the stock market fall?
‘The stock market is a device for transferring money from the impatient to the patient.’
- The stock market falls because if it only went up there would be no risk;
- If there is no risk then there’s no equity return/premium;
- And if there’s no return, people will sell;
- So the stock market falls;
- Market corrections are a feature, not a bug;
THE VALUE OF INVESTMENTS AND THE INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.