Stock Market Question (especially for the experts)

[silverchair]

Hi All,

I live in Ohio and I'm pleased and relieved that Obama will get another 4 years, but the Stock Market has me concerned. Why is it tanking today after Election Day? I hope this isn't a trend.

[C_U_L8R]

1. Europe

It's not a commentary on the election

[MSMITH33156]

4. Yes

the European debt crisis reared its head again. Greece is voting on more austerity measures, and there are strikes.

Just a general note on the stock market. There is something called "Market Efficiency." Basically, this means that expected outcomes are already priced into the market. Obama was expected to win, so it didn't do anything. If Romney had won, it might have changed the market.

It's the same thing with any other economic news. It's why the market goes up when earnings reports beat expectations, even if the numbers aren't good, and vice versa. Whatever is expected is already priced into the market. Only things that are unexpected cause movement.

[kickitup]

6. Correct!

They were going over this on CNN earlier and were explaining that the drop was due to something that happened in Europe and not the election. They did say certain stocks were moving up or down based on the election (health insurance companies and health care companies) but they made it clear that the market's drop in general was unrelated to Obama's win. Of course, that won't stop the right wingers from placing the blame squarely on Obama which they've already done on Fox.

[Demeter]

2. You are in the wrong forum--check this out

http://www.democraticunderground.com/111625250

[bif]

3. Not sure, but I just unloaded all my Apple stock.

Got tired of seeing it going down $5 to $10 a day.

[ipfilter]

5. The stock market is mostly

unhinged from reality. Don't pay much attention to daily trading noise. Long time trends are more important.

[Viva_La_Revolution]

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