EWOT: Week 7

EWOT Week 7

                The recent week’s classes taught me a lot about how trade and exchange functions to create more wealth.  When I sat down to write this post, I immediately thought of the way stocks/shares in companies function to create wealth by selling off portions of companies, creating wealth for the companies and the shareholders through trades in the stock market.  It reminded me of a conversation I had with my dad earlier this week about the possibility of me getting an ETrade account for stock market investment instead of keeping my money in a bank.  Her argument was that the banks would use my money to create wealth, helping the economy while increasing my own wealth, and that I shouldn’t risk my savings.  I responded by saying that investing in the stock market does the same, for trading stocks also increases the wealth of the companies by giving them the money directly from the consumer instead of through a bank and that the reward would outweigh the risk.   After sitting through Wednesday’s Econ class, I realized that both of our arguments were right, for both created wealth.  Furthermore, the recitation on Friday featured graphs concerning the argument of risk.  Though the graph with greater risk involved gaining more wealth, the whole class agreed that the graph showing fewer gains and no risk was more favorable than the graph with several massive gains but with a lot of risk.  Since I agreed with the class, I realized that my mom was at least right on this regard concerning investing in the stock market, and I therefore decided not to begin investing in the stock market until I could guarantee little risk in my investment.