Question

last week stocks show a decline of 30% or more during past periods in history including the Tech Bubble, Black Monday and financial crisis. it also shows that in every case the market rebound to the same or even greater levels than before the crisis. it is because the market expects the virus to be discovered and or it is because the massive fiscal and monetary stimulus is enough to save the economy?

Answer 1

It is because the massive fiscal and monetary stimulus is enough to save the economy.

Note that if you focus on the long term return on the amount invested then it is what the company will earn in which you have invested.

Although the price of market stocks keeps on falling & rising but that is because of the Demand & Supply of stocks in the market.

Even for a crisis, Companies don't incurr that much loss as much the stock price falls, as people with limited knowledge of market thinks that it will lead to zero there wealth & they start taking out their money, which creates a ripple effect, as the stock brockers who knew that market will revive also have to withdraw because less Supply will lead to lowering the price, and they want to get virtual gains out of it.

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