WHY STOCK MARKET RISE IN THE LONG TERM

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The widespread increase in the cost of goods and services throughout the economy is referred to as inflation. Prices that grow gradually result in better long-term income and profit for businesses (all things equal). Additionally, a company’s stock value rises in parallel with an increase in sales and profit. Therefore, inflationary growth is responsible for a portion of the global increase in stock index levels.

One of the factors that make investing preferable to saving is inflation. Your asset values will rise along with inflation as an investor. However, if you save money, it will eventually lose value.

The aforementioned is only accurate, though, when inflation is minimal. The U.S. Federal Reserve claims that a yearly inflation rate of 2% is advantageous for the economy. On the other side, unchecked inflation, like that experienced in Venezuela and Zimbabwe, would cause uncertainty, hinder economic expansion, and encourage investors to search for possibilities elsewhere.

  • Population Growth:

An estimated 7.8 billion people will inhabit the planet as of January 2021. And this figure is anticipated to rise before reaching a peak of 11 billion by the year 2100. A greater population often translates into a broader market that businesses can serve. And over time, the value of the companies that effectively sell to a more significant, expanding market increases

Additionally, more specialized labor and businesses may be supported by greater populations. A million-person small emerging economy, for instance, may be mostly made up of the manufacturing, agricultural, and raw resources sectors. However, an economy with a population of 100 million that is larger and more developed may brag of specialized businesses in technology, communications, banking, commerce, entertainment, tourism, professional services, etc.

Naturally, there are a few smaller economies that stand out as outliers, such as Singapore and Switzerland. However, a bigger population generally results in more economic growth and productivity, which leads to larger, more valuable enterprises.

  • Technology: 
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