What does the stock market actually do that's so important?

[laconicsax]

I understand what stocks are, how they work, and have a handful of investments.

What I'd like to know is what the stock market does that makes it important and why can't we do without it.

[ProgressiveProfessor]

1. It raises captial

[Speck Tater]

2. It gambles with capital.

In today's market with computer trading 73% of all stocks purchased are held for less than 11 seconds before being sold. Google "High Frequency Trading" to see what today's stack market is really all about. It's about skimming vast quantities of money out of the real economy and providing nothing of value in return.

[ProgressiveProfessor]

5. IPOs do raise captial directly for companies

[ProgressiveEconomist]

8. As do more numerous but dilutive SECONDARY offerings. LIQUIDITY for all shares

encourages investment in initial and secondary offerings, for a simple reason:

If you know that you can sell something at any time, instantly and for a fair price, you're more likely to buy it.

[Brickbat]

3. Shame on you!

Trying to peek behind the curtain like that!

[Skink]

4. It effects pension benefits.

each year depending on how one sets the allocation of payouts.

[alfredo]

6. It puts all the thieves in one place so we know where to go

with the warrants and shackles.

[applegrove]

7. It allows the middle class, rich people and people with good ideas upward mobility.