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Great Depression

The Great Depression: All About It

It was the greatest and also the most extended economic downfall and recession in the history of the modern world. It started with the United States market crash of 1929 and did not actually end till the year 1946, which was after World War II. Historians and economists all over the world often cite that the ‘Great Depression’ was also the most catastrophic economic situation in the history of the 20th century. There was actually a short depression which lasted from 1920 to 1921, and this one is actually known as the ‘Forgotten Depression,’ where the United States stock market fell by almost 50% and also corporate profits declined over 90%. The U.S economy enjoyed some robust growth when the rest of the decade knocked on the door. The era came to be recognized as ‘The Roaring Twenties,’ and it was a period when the American public found out about the stock market and decided to dive in head first.

Here are a few notable bullet points to remember:

-    The Great Depression was the longest and greatest economic downfall, recession, and crisis in the history of the modern world. modern world -    In the year 1929, there was a market crash that wiped out a great deal of nominal wealth for businessmen and individuals of all kinds. -    The American public actually began a whole frenzy where they started investing in the speculative markets in the 1920s. -    Many factors contributed to the Great Depression. Factors like inactivity, which was followed by over-action by the Fed. -    Presidents Hoover and Roosevelt tried mitigation of the impact of the depression with the use of some government policies. -    Neither the beginning of WWII nor the government policies can be credited single-handedly with the ending of the Great Depression. -     Trade routes which were created during WWII actually remained open and also helped greatly so that the market could recover. debate still remain -    Finally, the Great Depression was actually the result of some unlucky combinations of factors- a FED that was flip-flopping, protectionist tariffs and also inconsistently applied efforts by the government interventionists. It could have even been avoided or at least shortened by a change in any of the above factors. -    The debate still remains to this day whether the interventions were actually appropriate, and many reforms from the New Deal-like social security, insurance for unemployment and also agricultural subsidies which exist to this very day. An assumption that the federal government should actually act when there is a national economic crisis is undoubtedly strongly supported. This kind of legacy is actually one of the reasons the Great Depression is actually considered as one of the seminal events in the history of the modern United States Of America.
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The 4 Types Of Economies

The method that scarce resources get distributed with an economy determines the exact type of economic system that it is. There are mainly four different types of economies, and here they are: -    Traditional economy -    Command economy -    Market economy -    Mixed economy When we look at each economy individually, we realize that each of them has their own strengths and weaknesses. Now let’s take a closer look at each of them in brief depth.

Traditional economic system:

entire planet It is the most traditional and also ancient types of economies on the entire planet. Vast parts of the world still function under this conventional economic system. These areas actually tend to be rural or even second to third world places which are not developed completely, or they have not started getting metropolitan either. These places are closely tied up to land and mainly by farming. Generally speaking, there will be almost none to little surplus in this type of economic systems. Each member of the traditional economy has a specified and also pronounced role, and these societies tend to be very close-knit and very socially satisfied. They also lack access to advanced forms of medicine and even technology that they can use.

Command economic system:

In a command ecosystem, a considerable part is controlled by a centralized power. Since the government is a central feature of the entire economy here, it is often involved in all sorts of planning and distribution of resources kind of activities. A command economy is completely capable of creating a healthy supply of all of its resources. It also rewards people with all sorts of affordable prices.

Market economic system:

In a kind of free market economy, households and firms act in the form of self-interest to determine how the resources get allocated and what goods get produced, even who and all buy these goods. This is completely in opposition to how a command economy works, where central governments get to reap and keep the profits. It is known that there is no government intervention when it comes to a pure market economy. No TRULY free market economy exists at all in the world. In this economy, the market and the government are separated. The separation prevents the government from becoming all to powerful and also keeps their best interests aligned with the markets.

Mixed economic system:

It is a combination of different types of all economic systems. This system is a perfect cross between a command economy and a market economy. When it comes to very common types of mixed economies, the market will surely be more or less government ownership-free except for a few key areas, when it comes to transportation or even sensitive industries like railroad and defense. The government may be involved in the regulation of private businesses.
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Before Investing

Things To Consider Before Investing

If you have thoroughly no experience in investing on your own, getting started and being successful will undoubtedly be somewhat intimidating. It can also be quite difficult to determine, the amount of money should be in stocks and other types of investments. You should also see what kind of stocks you should look for and also be on the lookout for whatever kinds of rookie mistakes that you may make and avoid all of those. With all of that in mind, here is a list of 10 things all amateur investors should consider and keep in mind. keep in mind 1. You should decide how much of your portfolio should be in stocks. There is actually no rule that is set-in-stone, but generally speaking as you get closer and closer to retirement, you should actually reduce your exposure to stocks because you will want to preserve your capital reserves. There is also a rule of thumb which you should follow; it states that you should take your age and deduct it from 110 to get the percentage of your portfolio that you should actually spend in the stock market and also the stock of your preference. 2. How many stocks should you actually purchase? If you just want to buy individual stocks, then you should buy at least 15 different stocks across a lot of different industries because you will want to diversify your portfolio. This might not exactly be practical when you are just starting out. An alternative that you can exercise is buying a lot of individual stocks and to invest the majority of your money into index funds and then buy 1-2 stocks with the rest. This will eliminate any guesswork and also allow you to get experience while evaluating stocks.
3. You have to choose between individual stocks and also index funds. An index fund actually allows you to invest in a lot of stocks by purchasing just one investment. For a good example, an index fund will give you exposure to all of 500 stocks in that particular index. Index funds are actually excellent tools to properly diversify your portfolio and also reduce risk at the same time. If your money is actually spread across hundreds of stocks and one stock crashes, then, the impact to your portfolio will undoubtedly be minimal and negligible. 4. How much profits can actually be expected? It is greatly advised that new investors take a long term view of the markets and not get disheartened when and if they don’t get a whole lot of profits when they start out. In any kind of given market, it could actually gain and lose a substantial portion of its value. We should be ready for anything and be steady.
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