Question

How does the stock market influence the finances of individuals, even if they don't personally invest?

Answer 1

The stock does impact individuals even if they don't personally invest in the stock market. There are 2 reasons for this.

First, the stock market has a big psychological impact on all individuals and on all companies. Second, companies will change their products and their prices depending upon the direction of the stock market. For example, a stronger stock market would allow a company like apple to raise their prices on their iPhones. Therefore, this price increase will affect all consumers, regardless if they have any money in the stock market at all. If the stock market (economy) is weak, companies may lower their prices in order to attract more sales. For example, gasoline prices are typically lower in a weak economy, thus everyone benefits from lower gasoline prices.

Answer 2

The changes in the stock market usually affect all the citizens of a particular country. If the stock market is doing very well, people will put their money in the stock market and buy more shares; this creates more jobs for people; since the companies who deals in stocks will be able to employ more staff. It also increases the amount of tax that the government will be getting; this will enable the government to construct more public structures and to pay its workers. The reverse is also true when the stock market is not blooming.