Reasons Not To Buy Stocks
Let's be dispassionate for a few minutes and try to divorce ourselves emotionally from our hard-earned money and consider the following situation.
Wall Street was bailed out with billions of tax payer's dollars to avoid a collapse of the global economy at the end of President Bush's administration.
The remaining half of the bailout money was left in the hands of the incoming administration and President Obama obliged based on the fact that global economies were too intertwined with our own. It was stated that an economic downturn worse than The Great Depression would ensue if nothing was done to rescue the banking institutions that had played a dangerous game of financial irresponsibility. They were, in fact, "too big to fail."
Since the banks and corporations received the bailout, they have been sitting on the money without investing it in stock, infrastructure, consumer loans or anything that makes the economy sing and stocks rise. If the "experts" in the field are unwilling to invest money that is not theirs to begin with, does it inspire confidence in stock investment in the average person? Most likely, this is a resounding "no" and we are back to feeling emotionally attached to hard-earned savings we are not willing to gamble away on shady financial games.
Consider the following economic news: On Friday August 5, 2011, the S&P downgraded the credit worthiness of the United States for the first time in the history of the country.
The downgrade occurred for the following reasons:
1) The political unwillingness of the parties to work on restoring the American economy and having a cogent plan that puts unemployed Americans to work.
2) The ugly hostage situation and games played with raising the debt-ceiling for political gain sent shivers of uncertainty into the financial community.
3) S&P stated that they did not feel enough was done to assure the credit worthiness of the United States.
For those who live, breathe and sleep all that is Wall Street, there may be a few stocks worth purchasing and holding on to for the next few years, but for the average American with cash in the bank, the prospect of taking a huge loss in this volatile and uncertain global market, is not appealing. If the big players are not investing, why should you?