Question
I need a comment for each post. Thank you so much for your help. First post: In the type of Investment, didn't realize investments also
I need a comment for each post. Thank you so much for your help.
First post: In the type of Investment, didn't realize investments also meant investing into material items to better the future and not only purchasing stocks. An example would be business investments. To increase or improve productivity, businesses will invest in new equipment, structures, or intellectual property to increase the productive capacity of the economy. The second type of investment is keeping inventory/ product maintained. Because the production process is so difficult and fast-moving, keeping inventories is counted as capital stock short term. Housing investments are the final type because they do increase the economy's capacity to have rent in circulation over direct profit. This is a significant concept to understand because as business conditions quickly and dramatically change, so will your investment decisions. By figuring out what can increase the investments to expand/ grow the business
Second post: speculative bubble, also known as stock market bubble, describes a financial situation where prices for a stock or an asset rise rapidly over a period of time and far outstrip its intrinsic value. What's fascinating about this phenomenon is that all these stock buyers and investors who participate in it know that it is a bubble (because its prices aren't justified by its fundamental values), yet they still do it anyway. This brings us to think that perhaps the reason why many people are so willing to take risks with the speculative bubble is that it is a very quick and easy way to become rich (or become broke). A speculative bubble sort of resembles extremely high-risk gambling because everyone bets that there's always a buyer who will pay more no matter how high prices go, hence the "greater fool" theory, so they keep buying stocks in hopes of selling them later at a much higher price, and thus further inflating the prices. Since nobody knows when the bubble is going to pop, everyone wants to jump on the bandwagon while they still can due to fear of missing out. And those that join the bubble much, later on, will be at a larger disadvantage and risk. It's safe to say that the rule "first come, first served" can also be applied in the speculative bubble.
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