How have Investments changed with the Current Economy?

  1. J.S.Matthew profile image82
    J.S.Matthewposted 5 years ago

    How have Investments changed with the Current Economy?

  2. On da Money Show profile image61
    On da Money Showposted 5 years ago

    The traditional spectrum of investments ie stocks, bonds, mutual funds, commodities, options etc. have basically remained the same. What has changed materially though is investor education, awareness and access to real time dynamic information on which to base their investment decisions. This should not be taken to mean the investing public is any better or smarter in the scheme of investment selection. Just that they have more resources and information at their disposal.

  3. artariq profile image61
    artariqposted 5 years ago

    Do you mean household investments or business investments? And which economy are you mostly concerned about? I assume the US, but note that the global economy is so intertwined that knock-on effects of economic climate changes in one region can have far reaching effects elsewhere. What applies to one economy does not necessarily apply to another (or it may apply in an opposing way). Also, how exactly would you describe the "current economy"? How you perceive the economy needs to be known before a reasonable answer can be offered, because in general, people can be feeling optimistic about it or pessimistic.

    I think in general one may safely say that currently the US economy has sputtered. The stock market is down yet again, housing levels are thought to get a little worse before they get better, unemployment rates are still quite high - all of which do not paint a very rosy picture. In these kinds of circumstances, usually investment levels are also low as households and industries become generally more conservative in their investment decisions. Thus, people tend to save more and consume less, which unfortunately feeds back into a vicious cycle of depressing times leading to more depressing times.

    It's tough to get out of this, but appropriate government fiscal and monetary policies usually have to come into play here to jump-start the economy. Paul Krugman, Nobel laureate for Economics, for instance, has said that the 800 billion USD that was used to stimulate the economy was not enough and perhaps 2 or 3 times more of that is needed. Remember, this stimulus was meant to get people to start consuming more again and for businesses to start getting more confident to invest again as well.

    In short, there is no short answer smile