Dow Down 416 pts!-Why?

On Tuesday, The Dow Jones Industrial Average dropped down 416 points. This is the largest drop since the Stock Market first opened after 9/11. The Dow went down due to a world wide sell off. The key economic findings follow sharp declines Tuesday, which began following a drop in the frothy stock markets of mainland China that raised questions about whether a larger market correction was in the offing. Stocks fell in most of Asia earlier Wednesday although the Shanghai Composite Index, whose nearly 9 percent drop set off the domino-effect selling, closed up nearly 4 percent. Stocks were also off in Europe, but the declines were milder than on Tuesday. Even though it may seem like this is a major drop in the stock market, it really can't compare to the numbers of the Great Depression or 1987. I will keep my stocks as of now because I believe the stock market will be back to normal by next week the latest. I have heard that it won't be the same until the summer time but i don't believe that. Now is a great time to buy stocks since the prices drastically dropped and this is probably the cheapest it will be all year.

Opportunity Costs

When econonomists speak on opportunity costs, they are talking about the cost we pay to give something up in order to gain something else.

Types Of Economic Systems

A traditional economy is an economic system in which resources are allocated by inheritance, and which has a strong social network and is based on primitive methods and tools.

A planned economy is an economic system in which the state or government controls the factors of production and makes all decisions about their use and about the distribution of income.

A market economy is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system rather than by the state in a planned economy.

A mixed economy is an economy that has a mix of economic systems. It is usually defined as an economy that contains both private-owned and state owned enterprises or that combines elements of capitalism and socialism, or a mix of market economy and command economy.

Communism is an ideology that seeks to establish a classless, stateless social organization, based upon common ownership of the means of production. Socialism refers to a broad array of doctrines or political movements that envisage a socio-economic system in which property and the distribution of wealth are subject to social control.

Stock Market Game 1-Intial Investment Strategy

My investment strategy for this stock market game is to invest in companies that have a positive rating for the month. I also invested in companies that have been very successful throughout the 52 week period.

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