Dear Carol,

One of the things I'm concerned about is the effect that the stock market has on decisions that are being made by large corporations.

The stock market is like a popularity contest and the shares are like baseball cards. All the shares traded on wall street belong to owners other than the company who issued the stock.

In other words, the company made it's money when it first put it on the market (of course they still have unsold shares that reflect the market price of the traded stock)

I think a lot of decisions are made that make the short term bottom line look good, but that are very bad for us in the long run

In the long run (which is the best way to look at ownership) the market has always gone up and at about a 10% per year average since inception.

I'm having a hard time figuring out what might be a better way of doing things, but I feel pretty sure that we need to try to come up with something

Well, the whole world does it this way, there are stock markets in all developed countries. The CAC, FOOTSE, Hang Seng, Nikee,(not confident on all those spellings) The Chicago Board (Commodities) NASDAQ (volitile tech stocks) American Exchange not to mention the bond markets.

In the case of stocks (equities) you can own a piece of a corporation by buying shares.

In the case of bonds, you can loan money to a corporation or government by "buying" a bond.

Bond and stock prices are typically opposite each other in current valuation (if stocks are doing well, bonds are flat and vice-versa)

And there really are a lot of us who are not in a financial position to buy stock, whether we want to or not.

True enough, but today, a high percentage of teenagers are stock holders and have sophisticated portfolios. Had we been taught this information and encouraged to invest in high school, we'd all be millionaires by now. Unless they screw up and sell low, they are all set for retirement.

The market has never permenently gone and stayed down.

Nite.

mav out