eli5 How can stocks continuously appreciate in value?

Question

Every post I read says to invest in a low cost spy index fund as it rises, on average, 10% a year.

How can an economy continuously grow nonstop with no top in sight?

Is it simply because the money supply gets pumped? Because the government throws money at any chance of a recession? ( such as bailing out all bank accounts past 250k at SVB bank?) Because of tax incentives of throwing our wages into the markets?

In: Economics

Answer 1

The market reflects the value pumped into it. The more money people invest, the more value there is in the market, and so the more valuable your share. As long as we don’t stop, there is no end in sight, but the moment people start to seriously collectively doubt the market it crashes.