What Causes the Fluctuation in Stock Prices?

Investors can expect a fluctuation in stock prices on a daily basis. Buyers and sellers cause changes in prices, and therefore, stock prices change as a result of supply and demand. It is this dance between buyers and sellers, supply and demand that determines the value of each share. If more people want to buy stocks than sell them, the price goes up. Conversely, if more people want to sell shares than buy them, there will be more offers (sellers) than d… Dear fellow investor.

Market activity affects stock prices on a daily basis. Buyers and sellers cause changes in prices, and therefore, stock prices change as a result of supply and demand. And it is this dance between buyers and sellers, supply and demand that determines the value of each share. If more people want to buy stocks than sell them, the price goes up. Conversely, if more people want to sell a stock than buy it, the supply (sellers) is greater than the demand (buyers), and the price falls.

Because the company owns the shares, they belong to it. So even if you own one share of the company, you own part of it, no matter how small it is. Thus, the share price indicates how much, according to investors, the company costs. Stock prices can remain stable for months or fluctuate sharply, known as volatility.

There are hundreds of variables that affect stock prices, but the most important is profit. Own profits can be described as the company's profits after taxes and all other deductions, ie they are net profits. There is often a misconception, especially among beginners, that a stock that has risen will always fall, or a stock that has fallen will always rise.

On the contrary, there is also the misconception that a stock that has risen will always grow. However, this is not the case! Stock prices are not determined by the laws of gravity, but rather by the desires of investors!

However, no market operates in a vacuum. In a world without borders and interconnected, such as the stock market, the slightest rumors or threat of war, rising oil prices or rising interest rates, for example, can provoke a reaction in world markets, which then react quickly and unpredictably.

In addition, markets also respond to less disturbing news and events as a gap. One wrong word, mistakenly said by an analyst or politician, can cause a chain reaction and panic that sends markets into red territory. Once investors come to their senses, stock markets may even start to rise again on the same day.

We may not be able to predict the forces that are pushing markets to fluctuate up or down, but by analyzing and understanding them, we will be better prepared to overcome lows and wait for the influx of fortune. However, it is clear that it is always important to evaluate the company on its principles.

In the long run, good, reputable companies with a good foundation often return to their true value and strength, finding out speculation based on rumors and insinuations. With respect to successful trade.

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