Why did the stock market in 2021 was increased significantly?
2021 was the best year for so-called equity investors. the stock markets all over the world skyrocketed. everybody was making tons of money. Is it an illusion? some will say no, it’s the real thing but some will say it is an illusion because the stock markets have not really increased but more likely is that our money value was decreased.
Let me give you an example. do you remember the example with the gasoline prices? once upon a time (in the ’90s) one gallon of gasoline cost less than 1 USD and now it costs more than double, the reason is that our money value simply decreased.
The same thing with the stock markets our money value decreased in 2021 so the stock market skyrocketed. please note, that this idea is not referring to a specific stock that can be inflated because they have great performance or profit increase. we talking about the general indices.
So why 2021 was the best year for the stock markets?
the answer is very simple since the COVID crises governments around the world were printing money like crazy in order to offer assistance packages to their citizens. these out-of-control money printing causes a huge decrease in our money value so the stock markets increase like the gasoline prices, food, and other commodities.
This is the same reason why real estate prices around the world started to increase as well.
