I’ve read about these concepts and constantly hear them but I still don’t understand how money/assets fluctuations happen
In: Economics
The value of stuff changes over time because the demand for it changes.
Investments are denominated in a particular currency. For example, if you own US government bonds or stocks that trade on a US exchange, you’re going to get US dollars back when you sell them. So if you’re feeling less confident in the value of the US dollar, it makes all US dollar investments seem more risky, and you’re more likely to sell your US dollars for another currency and invest somewhere else.
Why might your opinion of the US dollar change? Well, the economy of each country changes over time, the government changes and its policies change, and the total number of available dollars changes too. So it’s natural that your opinion of it will change.
Tourism is another reason you might want to buy a particular currency, and demand for that can change over time too.
Same with companies. The company changes over time as revenues and expenses change over time, and if it appears more valuable then there will be more demand for the shares. If it appears less valuable, there will be fewer people buying shares and more people selling shares.
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