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What does the current stock market environment mean for investors?

stock market
Posted at 5:00 AM, May 17, 2021
and last updated 2021-05-17 10:17:20-04

With record highs and plunging lows, the stock market is making some moves like it's a rollercoaster ride recently.

So, what is causing the constant shift and what does it mean for investors' money?

ABC15 Arizona In-Depth Reporter Megan Thompson took those questions to Arizona State University Clinical Associate Professor of Finance Geoffrey Smith.

"Obviously, there's been some volatility... there's been some rallies in the stock market," Professor Smith said.

He thinks a lot of that has to do with the stimulus checks.

RELATED: Unpacking the myths of investing in the stock market

"So, the government is creating a lot of demand," Professor Smith explained.

However, with that demand, comes inflation.

"So, if you go to the grocery store, you know... you're going to notice that the price of things is much higher," Professor Smith said. "You can see that gas prices are much higher."

If someone is investing now or looking to invest, Professor Smith suggests not focusing on the day-to-day numbers.

"There is a difference between investing, which is... planning for the long-term and knowing that you're probably going to have more after 20 years," Professor Smith described. "And then there's speculating, which is trying to make a gambling profit, which... we don't usually recommend that."