If the market increases by 6-8% annually, how can someone in the future afford to buy even one stock if their income does not increase proportionally? Won’t stock prices increase 6-8% indefinitely prohibiting anyone from buying them? Also if the market crashes to correct the increases, how can anyone make a profit off long term investments without timing the market? I would like to invest in broad index funds but don’t quite understand how my money will increase if there is always the risk of a correction crash before I retire and take my money out of index funds. Thank you.
In: Economics
Most companies split their stock when it gets too expensive per share… for example, when Apple hit something like $600/sh a few years back, they split 7:1, so you had 7x the shares at 1/7 the previous price. It has since increased from like $85 to $310.
Berkshire Hathaway (Warren Buffet’s company) is the primary exception, with their shares trading at $334,500/sh right now.
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