Tags: news | small | moves | stock

Obama's Right About Social Media Making the World Look Scary

By    |   Wednesday, 17 Sep 2014 07:42 AM

Trying to reassure a group of donors that his foreign policy is working, President Obama recently noted that the world has always been a scary place. Now Twitter and social media, the President noted, bring that news into all of our lives. This applies to wars, terrorism and, although Obama didn't mention it, this also applies to the stock market.

For hundreds of years, stock prices have moved up and down. Occasionally the short-term price moves have a significant impact on a large number of people. This was true in the 1700s when the South Sea Bubble collapsed and in the Flash Crash of May 2010, for example. But most days the short-term fluctuations in the stock market have a significant impact on very few people.

Even though the impact of the market's daily moves is small, news about those moves is everywhere. Twitter, social media and thousands of other websites bring the stock market into our daily lives.

Individuals have no ability to influence major world events and they also can't influence stock prices. Constant news streams about news can cause stress, but that's about all it can do.

Instant and total immersion in news might make the world and the stock market seem scary. The truth is the stock market is less volatile today than it was in the 1990s and throughout most of the 20th century. The small moves that have always existed in the market just seem larger now that we know they are occurring.

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MichaelCarr
Trying to reassure a group of donors that his foreign policy is working, President Obama recently noted that the world has always been a scary place. Now Twitter and social media, the President noted, bring that news into all of our lives.
news, small, moves, stock
249
2014-42-17
Wednesday, 17 Sep 2014 07:42 AM
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