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My Theory on The Stock Market and It's Possible Crash

Yes I do in fact think that the stock will crash. And before you decide to say that I'm wrong and that the stock market tends to go up on average...please keep reading my theory...

Basically the theory is that the stock market will crash due to 401 (k) pension plans, the baby boom generation, lack of financial education, and greed.

Yes...I believe that the future of the stock market will indeed by very bleak due to these causes...and it's not going to change unless we make a drastic change in society.

The baby boom generation is a generation of people who were born in a huge amount from the years, I believe 1940-1970, than any other time...these are the people who will effect the economy due to the Employee Retirement Income Security Act (ERISA), which caused a subtle pension reform from going from a direct benefit pension plan, to a direct contribution pension plan...in other words, the beginning of the 401 (k)...

By the year 2016, the baby boom generation will begin to hit their reitirement age and begin to pull out their 401 (k) pension plans...these boomers will actually be the lucky ones because they won't be in the crash, but they will start the chain reaction...

The next baby boomers will also begin to take out their 401 (k) plans soon after the first baby boomers retire...the question is, if the baby boomers all retire...how will the stock market hold up if the majority of the people in the stock market are selling their stocks?

It then becomes a simple matter of supply and demand.

Due to the high amount of supply (the stocks being sold by the baby boomers 401 (k) pension plans) and the low amount of demand (the generation after the baby boomers with not as much buyers as there are sellers) due to the fact that there aren't as much people as there is in the baby boomer generation, the stocks' value will indeed decrease.

With the slow decrease of stocks, the lack of financial education will soon take over along with greed, and people will begin to worry about their money in the stock market. Mostly the ones who depend on the market for their retirement due to their 401 (k) pension plan or Roth IRAs...

The stock market is now hitting an all time low...and even though they'll get a high tax penalty for selling their stocks early to save whatever's left of their retirement money, they'll still do it to save whatever is left of their money...causing more stocks to be sold, with less buyers due to the knowledge of knowing that the market is going down.

This all leads up to the biggest stock market crash in history...what a blow for the economy!

The market will crash...in my opinion...and when it does, there comes yet another depression...the biggest depression ever created...due to the lack of financial education, 401 (k) pension plans, the baby boom generation, and greed...

It's going to happen...it's only a matter of time...

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