Reply to Why is the US stock market so lucrative?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]No one has given you the simple answer.

It's because the economy has been doing well and it reflects in the value of the company's revenue.

Think about it long term.  If you're a fortune 500 company, in order to keep up with inflation and costs, they always increase their prices to their clients.  That increased revenue / profit is why their stock value goes up.  [/quote]

The economy is absolutely not doing well. Literally all of the US stock market growth in 2025 was driven by AI companies and AI hardware suppliers which are a house of cards that will eventually collapse, the only question is when. [/quote]

Sigh . . . the economy is mostly but not fully doing quite well.  AI is a part but just a part.  The top 60% for the most part are doing well.  [/quote]

The Economy is not doing "well" what planet do you live on?

Unemployment is rising fast, Inflation as well. The $ is crashing, our National Debt is rising at an exhorbement amount ...... 
Go take Econ 101 and get back to the people with brains.[/quote]

Inflation year-end 2024 was 3.75%, for year-end 2025, 3%. So not rising.

Unemployment has edged up a bit. 4.1% year-end 2024, 4.4% year-end 2025. So not rising "fast."[/quote]

And, the S&P rose 18% in 2025, the NASDAQ was up 21%, the DJIA was up 14.9%, and the Bloomberg U.S. Aggregate Bond Index returned 7.3%.  Those are not the hallmarks of a problematic economy.    
[/quote]

To the prior PP's point, much of that gain is due to the Mag 7 (not even including other AI stocks).  From Google's AI:

The Magnificent Seven stocks (Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, Tesla) have driven a massive portion of S&P 500 gains, recently accounting for over 60% of positive performance in key periods. These seven companies represent roughly 34%–36% of the total S&P 500 market capitalization as of late 2025, up from ~12% in 2015.

If they experience a correction . . . [/quote]

Many, if not most, individuals invest through funds.  Mutual funds, etfs, what have you.  They people that manage those funds are well aware of economic conditions and reallocate their exposure accordingly.  Not to say that the correction that is coming won't hurt, but it will not be as crushing as it will be for those who are heavily invested on an individual share basis in those and related entities.

Those who invest through funds and have disproportionally invested in tech funds may wish to reallocate to funds which focus on staples and other sectors that are more immune to tech crashes.[/quote]

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