Andy, this one's for you...
*Market indexes are the value of certain stocks which represent the overall stock market. Learn more here.*
S&P 500 (Standard’s & Poor 500): Made up of the 500 most widely-traded stocks in the U.S. -4.84 (-0.17%)
The S&P 500 hit an all-time high Tuesday, and Wednesday the whole market broke records with the longest-running bull market (a market where share prices are rising) ever. Even though the bull market is crushing it, some other signs aren’t lookin’ so hot.
IN THE NEWS:
If you were the kid who never wanted to bring home your report card, President Trump’s vibing with you. Currently, companies report their earnings quarterly, in a pseudo “report card” to investors. That practice is over 40 years old, and Trump has asked the Securities and Exchange Commission (SEC) to nix it. He’s pulling for a 6-month report instead, which supporters say could help companies focus less on dressing things up for investors and more on long-term growth. Critics argue that it will create less transparency and make it harder for investors to make decisions. It’s up to the SEC to make the call.
Tesla CEO Elon Musk is also hating on report cards this week, but his response was to walk away from the market. Tesla went public in 2010, offering shares of its stock for purchase to the general public for the first time. Now Musk wants to take it back. On August 7th, he announced he was considering buying back all of those shares and becoming a private company again, and cited ongoing pressure from investors and quarterly earnings reports among his reasons. Now one of his investors is saying “please, don’t.” In an open letter published Wednesday ARK Investment Management, which owns 580k shares of Tesla (worth $164 mil), begged Musk to reconsider. The argument? Everyone, including Musk, will make more money and be more successful if Tesla stays public. Who’s to say what Musk will decide, but rumor has it he’s already hired Morgan Stanley to help Tesla go private.
MONEY TRICKS ANYONE CAN TRY:
*Do you have money tricks to add to the pile? Drop us a line.*
Nickel at Night Journal (Not to be confused with this): We all know that financial stress is a burden, and as you hit the pillow each night after a long day, outstanding bills and budget to-do’s can pop into your mind. UniFi friend @wisewomanwallet suggests keeping a “nickel at night” journal next to your bed where you write out your money thoughts. Then in the morning, you can add those notes to your money to-do list, so they get taken care of. Sweet dreams (free of stress) for everyone!
DEFINITION OF THE DAY
The stock market: A group of markets and exchanges where stocks and other securities are issued and traded.
The news has been buzzing about the big bull in the room all week. Stock markets have been rising in value for the longest time in history - so today, we are chatting about what a stock market actually is.
The stock market is just like a grocery store or food market. But instead of selling tangible goods like cookies, shampoo, and Le Croix, the stock market sells a variety of intangible things called securities.
A security is an intangible good that has monetary value and can be traded for other similar goods. The security we hear about the most is a stock. A stock represents a small slice of ownership in a company.
There are several different places you can buy securities, including the New York Stock Exchange (NYSE) and the Nasdaq. When people say “the stock market” they’re typically referring to how all of these markets together performed.
Last week we introduced the terms “bull” and “bear” (why the names?). Basically, when the market has been steadily rising in value at a certain rate it’s called a “bull” market, and when it has been falling at a certain rate it’s called a bear market - roar.
The stock market has a pretty cozy relationship with American wallets. It both indicates and impacts economic health. When companies are growing, they typically hire more people and buy more from their suppliers. That creates more jobs, which means more people have money to invest in things like bananas, sweet sunglasses and... the stock market! Which means the stock market keeps growing and growing when the cash is flowing. It’s a big cycle that can either grow rapidly (like right now) or decline rapidly like it did during the Great Recession.
*This section is not sponsored by any third parties. These are our pure, honest opinions on what we think is easy and works best!*
If you’re interested in learning how to buy a stock online, we’ve got a guide for you. Here, NerdWallet will walk you through a step by step process to ensure you’re set up for success - whether it’s your first time, or you’re a seasoned buyer. And if you don’t feel quite ready to invest real money, why not invest some fake money with this stock market game that lets you simulate investing? Cheers to new and fictitious investments, may the odds be ever in your favor!