Haruka asked:


Particularly the impact of a DECLINE in the stock market on asset prices.

10 POINTS to most helpful/detailed answer! ^-^

NOTE: Bonus if you can answer how stock market impacts on debt?

RANDELL

One Response to “How does the stock market impact asset prices?”

1. Savetheworld on December 24th, 2009 6:30 pm

   Well a decline in the stock market means your wealth has been diminished. By the quantum of the decline your wealth would decline proportionately. People would feel less inclined to invest in other assets like real estate due to the psychological effect as well as a real cost of a decline in wealth. Gold on the other hand might go up or down and it depends on other factors. If the dollar becomes stronger than oil prices may stay within reason. Only if the dollar becomes weak we could see oil prices escalate.