How do natural disasters affect the stock market?

1 Answer

Answer :

I’m no financial expert, but I believe investors have so little confidence in the health of the national and world economy nowadays that they sell shares at the slightest hint of anything that might impact it negatively, and that pushes the stock market down. The reverse is also true—good news motivates shareholders to buy. As for natural disasters, specifically, I think stockholders fear, at least in part, that when our country announces it will contribute huge sums of money and manpower to disaster aid, it places a strain on our economy.

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