Why you, as a student, should care about the stock market

Amber Kakkar, Staff Writer

The stock market is a place where stocks and bonds are “traded,” or bought and sold.  Stocks and bonds are defined as the reflection of the strengths and weaknesses of companies that underpin our economy.   The objective is to buy a stock, hold it for some time, earn your dividend, then sell it for more than you paid.  Basically, it is a game played with all of your parents’ precious earnings – a game which requires lots of awareness, and a little bit of luck.

Now, why should we, as students, care about what goes on in this game?  Well, when we all graduate and go out into the so-called “real world,” our financial well-being depends on whether the stock market is soaring or crashing.  If the market was crashing, like it did during the Depression Era of the 1930’s and the Great Recession of 2008, big corporations, such as Apple and JP Morgan, will have a limited number of jobs available with an incredibly high number of applicants. This will create an imbalance in supply and demand and large companies will no longer have the revenue to employ all these people, causing unemployment numbers to skyrocket.  

On the more optimistic side, when the stock market grows, it results in an overall feeling of optimism about the health of the economy.  When people feel better about their wealth, consumer spending increases, which in turn creates employment and has a positive effect overall.  

“Not keeping track of the economic state of the market will cause students to be blind to the financial status of companies they want to work for.  In addition, students will learn more early on so they will be prepared for the future.  Overall there is no harm if students monitor the stock market,” said freshman Emily Djohan.

The roller coaster of the stock market tends to foreshadow the economic status of the U.S. for the upcoming months.  With our country being the largest economy in the world with the greatest gross domestic product (GDP), there are global repercussions whenever the US market rises or falls. 

 “A GDP that is rising will cause the stock market to rise as well,” said freshman Sarika Israni.

Furthermore, with college just around the corner, many students will begin the dreaded process of taking out student loans.  Student debt is one of the most urgent crises facing our nation today.  The average outstanding student loan is standing at $37,000, and with college costs escalating every year, the future generation of workers will be saddled with huge debts before they even become employed. 

 With these obligations, Americans will be reluctant to take on more debt to buy homes or cars which as a result will have a negative impact on the overall economy.  This is detrimental to the economy, because when fewer goods are bought and sold, the market as a whole plummets, as less wealth is generated, leading to a decrease in innovation.

 “It’s crucial for students to know about the stock market, so they have background knowledge going into adulthood.  If they don’t have a basis of understanding prior to investing their own money one day, they won’t be able to learn from the past and run the risk of losing money,”  said freshman, Hannah Brooks.  

This is more of a reason why we as students should pay attention to the stock market, as our own futures are directly tied to it. Furthermore, since the stock market dramatically affects students, we should not only be aware of it, but pay close attention to the market and U.S. economy as a whole.