This question is wide open for what limitations could mean regarding the stock exchange. It could refer to the limitations that are placed on the economy or personal investor. We will examine both.
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.
- 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
The stock market is by and large run by those who have the money. Billionaires, millionaires, corporations and government investments are what keep the stock market from going bust. They have the money to invest. Smaller investors such as a personal investor or someone like you cannot impact the stock exchange by your investments only. It takes numerous personal investors to get the market to move. This is due to the funding limitations most of us have to invest in any of the stock market shares.
It means the stock exchange is limited by the amount of companies trading, the money one can invest, and the current risk given the economic situation.
