Thursday, March 13, 2008

Stocks ...

The stock market ... a place that amuses me to the core. I get dazzled at its dynamic nature, the flexibility and the impact it has on our lives. This year in stocks is an example how much variations this stock market can create.

The variations puzzled me so much, that I decided against investing in stocks. Despite enjoying my 2 years in the stock market ... Despite my immense interest in it ... Despite the fact that even now, I follow it like I own it ... despite all the reasons, I am not able to convince myself to enter the market again.

Well, how did this happen you may ask? It all happened due to the tax cuts that Fed announced. I could never understand why Fed would announce a $600 cut because the finance sector is not doing well. That was just the first cut. And the tradition continued ... Every time the index well low, Fed announced a tax cut.

How would that make a difference? I mean ... given the inflation is sky-rocketing, mortgage rates are too, gas prices are rising, etc etc, why would an extra $600 make you buy stocks? Seriously, why? However, it did. The very next day, the stock soared. They did great. People invested. I was missing something and still am. I am not able to figure out the answer.

Did Fed Tax Cut create an illusion that people felt richer all of a sudden? Can Fed Tax Cut be a permanent solution? Or is it something to stabilize the market temporarily while the real reason is addressed? What is the real reason? Does the problem have a good solution? Or is the world so messed up, the we need a revolution to set us straight?

All I am educated and experienced to say, the stock market really amazes me.