- Economic Limitations
The stock exchange is powered by investors who see the news from corporations, governments, and history of the company. These investors will weigh the news and also the corporation's performance over the long term. They will decide what is risky or not. When something changes in the economy the stock market can be directly affected. This can make the economy worse or better. For instance, in 2007 the subprime mortgage crisis sparked a recession that has recently ended. The fears of the crisis also created an issue with many stocks. Companies began to underperform on the market due to consumer fears. Corporations were backing off from investing in mutually beneficial stocks, as were personal investors. Given the cycle that the economy has it can place a limit on the stock exchange because it is also part of the cycle. When money is tight or there is no money to spend the stocks will be sold or held onto with little fluctuation.
- Personal Limitations