It's important to understand that the stock market is a leading indicator.
Everyone doesn't immediately get laid off when the stock market tanks. Everyone doesn't immediately get a raise when the stock market is roaring.
A lot of people are just now experiencing the stock market mini-crash of 2022, when the pandemic helicopter money dried up. In two years a lot of people are going to be experiencing the investments that are being made in the market right now. Most of them are going to wrongly ascribe those good times to the person holding high political office even though that person had nothing to do with it. This won't be the first time it has happened.
I don't think so. It is probably loosely correlated with the economy at best.
The stock market can soar in times of cutbacks which hurt non-asset owners but which benefit profit margins. The stock market can boom on liquidity surges that do not translate into economic investments. The stock market can crash while the overall economy does fine(wasn't 2000 basically this, with the economy not really suffering until after 9/11?).
Honestly nowadays industry seems to be just about maximizing stock value through hype and CEOs are basically hired just for that. Like all stocks are meme stocks now, profits be damned because you can always do some accounting maneuver, and as long as stock goes up you're all getting your bonus.
I wonder if my impression that this has increased a lot in the last decades is correct, and what would be the impact of this on the whole "stock market as indicator of economy" thing.
I think financial education is a major problem. People need to be taught about investing. I'm talking long term investing, not day trading, crypto, etc. Start early, invest regularly. This is the simplest way for a normal person to build wealth within their lifetime. Wage increases aren't going to get you there.
Why have everyone buy a share of some companies and rely on that risky gamble to insure their future? The markets were never meant to be a way to redistribute wealth, but to sell risk away, to anyone willing to take them.
Using markets as the primary way to redistribute wealth seems convoluted at best, and yet another perversion of their original purpose.
The "mini-crash" is already a non-event for any medium or long term investor. Anyone who invested since the beginning of 2021 is still up 50%. I'm assuming VTSAX or similar index fund. It's not even a blip.
It's important to understand that the stock market is a leading indicator.
Everyone doesn't immediately get laid off when the stock market tanks. Everyone doesn't immediately get a raise when the stock market is roaring.
A lot of people are just now experiencing the stock market mini-crash of 2022, when the pandemic helicopter money dried up. In two years a lot of people are going to be experiencing the investments that are being made in the market right now. Most of them are going to wrongly ascribe those good times to the person holding high political office even though that person had nothing to do with it. This won't be the first time it has happened.