I’ve read about these concepts and constantly hear them but I still don’t understand how money/assets fluctuations happen
In: Economics
In 1890, *Amalgamated Buggy Whips* was a great investment to capitalize on the growing demand for horse drawn transport. You want in on the action and want to own part of that company. Because other people also want that stock, the price will be very high – supply and demand.
You might pay a premium to buy that stock so you could receive dividends from their large sales of whips and whip accessories to horse owners.
But by 1930, the demand for those items has crashes, so you would want to sell, but because nobody else wants to buy, the price is very low – supply and demand.
While there are certainly manipulations and illegal things that happen, the actual prices paid are pretty much supply and demand driven. If there are more shared offered than people want to buy, the price will fall. If there are more buyers than sellers, the price will raise.
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