Finance- Global Stock Markets - Essay Example

The Dow Jones low point was USD10,608 and its high point was USD 11,439 a fluctuation of only USD 831, or slightly less than 1%. The change from the first point (September 20) to the last date charted (November 22) was even lower. The Israeli stock exchange rose from USD 34,361 to USD 35, 348, an increase of USD 987. At the same time the Dow Jones rose from USD 10,608 to USD 11,083.75, an increase of only USD 475.75. This means that if an individual had invested USD 100,000 across the board in each stock exchange at the end of the period their Israeli investment would be worth USD 104,597.

90 while their Dow Jones investment would have increased to USD 104, 484.80. Over a period of less than three months this is not an inconsiderable profit, particularly if it were to be increased by a factor of five to make it roughly equivalent to one year (as opposed to ten weeks). On the other hand, it demonstrates a remarkable disconnect between the markets and current events. This was no ordinary period in either the United States or Israel yet, viewed over two months, the stock exchanges slowly, but reasonably steadily, increased in value.

In the United States a mid-term election campaign was waged, that included cataclysmic predictions of a Democrat debacle and featured the wild card of the tea partiers. In fact the Dow Jones increased steadily from September until the election: The campaign uncertainty and predictions of disaster for the Presidents party had no negative impact on the stock market. On October 28, 2010, only days before the election New York Times columnist Paul Krugman wrote, “future historians will probably look back at the 2010 election as a catastrophe for America, one that condemned the nation to years of political chaos and economic weakness.

” His piece concluded with this warning: “So if the elections go as expected next week, here’s my advice: Be