How is it justifiable 4 the Dow to keep on rising,despite concern of ongoing (un)deremployment,high oil price?

so what I’m trying to ask here is, where in the real world,where most people live in, has the fundamentals for ongoing ROI(return on investment) & stock appreciation been coming from.

4 Responses to “How is it justifiable 4 the Dow to keep on rising,despite concern of ongoing (un)deremployment,high oil price?”

  1. exactduke Says:

    Profits drive the market – not unemployment & high oil prices. The American economy will do what it always does – adjust.

  2. Joseph P Says:

    there are many aspects which need to be covered when answering this question. First is to understand that the stock market is based on supply and demand. Since the market crashed, many people moved their assets from stocks to bonds. In doing so they created the mini vacuum that we are seeing now. See with the bond market about to experience a minor crash ( due to inevitable raising of interest rates) people are beginning to realize thaat their portfolios must be diversified and so more money is moving back into stock. This is creating a demand however since supply may be limited we will see prices rise.

    You mention unemployment. Although unemployment is around 10% we have begun to see signs of improving employment and thus the unemployment numbers will have a less meaningful effect on the stock market as they once did.

    Finally you mention High Oil prices. There are a couple things to note with high oil. First off is that this is not necessarily a bad thing. With oil increasing in value this may be a sign of inflation that may come further down the road. One of the few ways to beat inflation is to invest in the stock market, thus creating demand for stocks and raising prices.

    The problem that you are facing is the same problem that many Americans face. You are looking at the economic picture based on what you are seeing currently. Although this is expected of most people, to be successful in the stock market you must be forward looking. Also, because of the crash, many people are still thinking that things will be bad and remain bad because this is what was drilled in our heads by many media sources for an extended period of time, this however is not the case. Although our economy did not bounce back in a lively manner, it still recovered a great deal. I hope this has helped you understand and if you have any further questions feel free to send me an email!

  3. Net Advisor™ Says:

    I have no idea what the other Series 6 guy is talking about, but the answer is way off. He may trade options personally but one cannot trade options for the public as a broker with a Series 6 License. One needs a Series 7 min., and firm approval and better that SR 7 with a Series 4. One also needs a SR 7 to be able to offer stocks to the public. Series 6 is limited to "investment company products" such as mutual funds and UITs.
    — Fmr Securities Compliance Officer

    Oil prices are up over 100% in the last year $35.52 intraday low to $85 bbl. Commodity prices across the board are up 100-300% in the last 2 years. Inflation is already here.

    oil Jan 2009
    http://money.cnn.com/2009/01/14/markets/oil/index.htm

    oil April 2010
    http://money.cnn.com/data/commodities/

    I have written about this over the last 3 years here. The answer is very in-depth and I don’t have the time to write a book to answer this question. But I will give you the skinny.

    Linked here:
    "What Happened Up to Now? 12 Step Program For a Market Rally"
    http://netadvisor.wordpress.com/2010/04/26/what-happed-up-to-now-12-step-program-for-a-market-rally/

  4. zzz Says:

    I think it will eventually crash and burn. The U.S. dollar has continued to depreciate. Any currency that abandons the gold standard has eventually failed. Paper is paper, gold and silver are real currency that will hold value when you are wiping your butt with 20.00 dollar bills.
    What is there to back up all those dollars being printed right now? Do I hear crickets?
    Remember the Silver Certificates? Oh yeah, Back when our currency was backed by the full faith, credit, and confidence of the U.S. government. Today, our currency is becoming more worthless by the day. Our government can’t stand behind all the money they have printed. Excuse me while I go buy more Silver!