Monday, September 16, 2013

Stock/Bond Speculation



Stocks and bonds are financial economic concepts that deal with money. Both of them are considered securities or financial instruments that are tradable assets, ie. people are allowed to buy and sell stocks and bonds. In particular, the purpose of the stock market is to allow people to lend money to the company for investments. In return, the people will receive a share of the profit according to the size of the stock they hold in that company. Therefore, we can say that the people owning such certain stocks are acting as the "owner" of the company. On the other hand, the purpose of the bond market is also to let people lend money for the company or the government to make long term investments. In this case, the bond issuer (companies and government) owes the holder a debt in which the issuer must pay back with certain agreements, for example, in terms interest rates. Therefore, the holders in this context are the "lenders". In any case of the two, people are able to profit out of these markets by knowing how to play the game and when to or when not to invest. As a result, many people around the world are zealously involved in these markets since they generate ideally high returns through such economic transactions.

Relation to "The Great Gatsby"


The topic of stocks and bonds relate closely to Fitzgerald's novel, "The Great Gatsby", because the characters evolve around the dream of wealth. In a historical context, many new companies emerged during the 1900s from industrial urbanization, and this introduces the idea of stocks and bonds to the country.
More interestingly, the value of stocks rose immensely after the World War and people who held shares of the stock market profited as an aftermath. It raises the point that people with no wealth or social background can become instantly affluent and make a fortune from participating in the stock and bond markets. Therefore, we can say that the characters, in particularly Nick, engage in the bond market because they aspire to become rich. Not only that, the desire of wealth also reinforces the idea of The American Dream in the novel.


Resources:
http://www.fi-advisor.com/what-is-stock-market.asp
http://en.wikipedia.org/wiki/Bond_(finance)


1 comment:

  1. Great explanation of bonds and stocks and great job relating it to the novel. Love the nice relevant pictures you chose to help brighten up the entry. Great job Parima and cool blog btw.

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