Philippine stock market board (Photo credit: Wikipedia)

The American stock market index, as will all such markets around the world, is subject to ups and downs on a daily basis that are caused by numerous factors. For example, who could have predicted the 9/11 terrorists attacks, which had a huge negative impact on world stock markets? When Lehman Brothers, a major American investment bank, collapsed in 2008, the value of all stocks and company shares in the USA fell dramatically. More recently, the Greek debt situation has had an adverse impact not only in Europe but also on the American stock market, as has the political unrest in Syria.

When you consider these events, it is not surprising that the American public lost some confidence in their stock market. Another factor in the depressed levels is that higher unemployment has meant that fewer American citizens have the disposable income needed to make such investments.

Economic experts in America believe that their stock market is over-valued by a considerable percentage and they predict that the market will fall in the future. However, when this is likely to happen is difficult to forecast.

It is the view of economists that the time to invest in a stock market is when its index is at an all-time low. But of course who is to say that once it reaches its supposed all-time low the value of shares will not continue to fall even further?

Some financial advisers may suggest to their clients that they invest money in the stock market on a monthly basis in smaller amounts, rather than put in a larger lump sum in one go. This is on the basis that if the stock market does continue to drop further for a period of time, the client's monthly investment will buy more shares, but should the stock market start to recover then the clients' shares will increase in value.

But American investors are not the only ones reluctant to invest in stocks and shares. It is a view shared by many individuals across the globe. In the current economic climate and with political unrest in various parts of the world, it is hard to feel positive about financial matters. This feeling stops people from contemplating investing their hard-earned money and putting their capital at risk in the stock market.

Another factor is that an increase in the price of a barrel of oil has an impact on the world's stock markets, with shares in oil companies benefiting but other shares tending to drop in value.

With so many things around the world potentially affecting the value of the American stock market, economists believe it is a difficult decision for an American to take that step and invest once again in stocks and shares.

Sam is a journalist who writes about personal finance and has a particular interest in researching the best stocks and shares ISA for ordinary investors.