Wall Street Supremacy On Businesses And The Economy

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Wall Street by Nick Youngson CC BY-SA 3.0 Alpha Stock Images http://www.picpedia.org/highway-signs/w/wall-street.html

When people talk about ‘Wall Street’ what they automatically imply is the home of the largest U.S. brokerages and investment banks, along with the financial and investment community, which includes stock exchanges and large banks, brokerages, securities, and big businesses. Initially, it used to refer to the exclusive group of large independent brokerage firms that monopolized the U.S. investment industry, but nowadays its value and impact influence the world.

But what makes this place so powerful? In simple terms, Wall Street is a hub of cut-throat capitalism impacting not just the American economy, but also the global one. The reason behind this statement is because the U.S. is the world’s biggest economy, and according to Investopedia it” has been at the head of the table going all the way back to 1871. However, as has been the case for a good few years now, China is gaining on the U.S., with some even claiming that  China has already overtaken the U.S.  as the world’s Number 1 economy.”

What this means is that being the trading focal point in the biggest financial markets in the world’s richest nation, whenever the stock market drops or sudden changes occur on Wall Street, the whole world holds their breath and hopes for the better.

How Wall Street Affects Businesses

I’ll analyze this part from global wealth and a business-investment angle. First off, whether we like it or not, the stock market has a synergetic relationship with the economy and when the prices are up, so is the economy, translating into a general wealth effect.

However, Wall Street has had several crashes, with markets closing, situations that alarmed the world. In such dire contexts, many investors, brokers, and businesses go to loans if they believe they have a chance in such a challenging ecosystem. Staying educated and informed on today's’ market fluctuations is what can save a business. The more you know, and the more you analyze risk and profit strategies, the better chances you will have to not be bound by a loan.

Moreover, from an online investing standpoint, prices of stocks and other financial assets are established from the current statistics in order to make certain presumptions about the imminent future. Why? Because they form the basis for estimating an asset’s fair value. For instance, when an economic indicator is presented, if it had been already properly anticipated by Wall Street, it will produce no effect. But if it’s much higher or much lower, it will positively or negatively impact on Wall Street, which in return will affect businesses. For this reason, many companies hire research analysts employed by Wall Street firms to develop financial models in order to estimate revenue and earnings per share forecasts to meet “Street estimate” or “Street expectations.”

Strong Trends

There is much volatility across stocks, bonds and currencies, but investors have identified plenty of opportunities. First, you need to know how the exchanges work because the more shares trading hands every day, the higher the liquidity. Plus, low liquidity stocks pose high risks due to the possibility that an investor may be stuck with one, the price declining and no one to sell the stock to.

Furthermore, investors should monitor their stock, but not every day. Why? So they avoid getting emotional about the inevitable ups and downs of holding stocks and to keep a clear mind regarding their next move.

Regarding the latest trend speculated to be hugely successful, founder and CEO of Activate, Michael J. Wolf said that the tech and media industries will boom, transforming the way people do business. His insights forecast the $300 billion growth in Media and Internet, with 65% coming from end-user spend (content and access) vs advertising. Therefore, investing in these niches might be the winning hand investors were searching for.

All in all, Wall Street occupies the strongest influence on the U.S. and the world’s economy. If you wish to be a part of it, you’d better do your homework right, learn the best strategies and make the smartest decisions to survive, or better yet, to triumph and secure a wealthy future.