What Causes Stocks To Go Up And Down

Stock Marketing

Stock marketing and share marketing is a gathering of buying and selling stocks. A stock market is a place where individuals represent the share of their company. Stock can be bought or sold in the market according to their demand. If demand is high, the company is in profit, but if the shares go low, the company is at a loss. Investors buy stocks only for those companies which they think will go up in the future. Whenever an individual purchases a stock, they purchase a small percentage of that company, which is called a share. The stock market is also known as a meeting place of stock sellers and stock buyers. 

The purpose of the stock market is to facilitate the trade of security between sellers and buyers. This exchange of securities provides real-time trading information on the listed securities. Stock prices change every day according to the market forces. 

When an individual wants to buy stock rather than selling it, the price goes up. And if they want to sell it besides buying, the price goes down.

How it Started

The Dutch East India Company introduced the stock market in 1602. In India, stock marketing was started in 1875 by Premchand Roychand. In ancient times brokers used to gather together in the market to buy or sell shares. But now trading is available online. People can easily buy or sell shares online. 

Types of Stocks 

  • Common stocks- Common stocks are those stocks in which most people invest. Common stock is equality.
  • Domestic stocks- Domestic stocks are those stocks of American companies exchanged on different stock exchanges. Domestic stocks vary from the smallest of public organizations to the largest of manufacturing conglomerates.
  • International stocks- The international stock market leads to all the International markets that allocate stocks from their national organizations. Most countries have their stock exchange. The records track the variations in the value of a share of one market.
  • Growth stocks- A growth stock is any share in an organization that is supposed to grow significantly higher than the expected growth for the market. These stocks generally do not pay interest.
  • Preferred stocks- Preferred stock is a feature that is not supported by common stock, including components of both an identity and a responsibility implement, and is commonly acknowledged as a hybrid device.

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Factors:

There are various factors such as earnings per share, whether seller supply meets the expectation of buyer’s demand, and many other factors that can impact whether a stock goes up or down. We can expect exciting improvements in behavioral finance, especially since traditional financial conditions cannot seem to explain everything in the market. Here are some of the factors that show the increasing and decreasing of shares in the market:

1. Technical Factors

Technical factors are the mixture of external circumstances that change the amount and demand for a company’s stock. Stock goes according to a very short-term leaning. Sometimes the stock moves up, which can help in success. On the other hand, stock sometimes goes completely opposite, which leads to a loss. Economic growth indirectly provides income growth. It simply means that if the economy is increasing, then income will grow. Investors who understand fundamentals completely can adapt themselves to professional forces.

2. Macroeconomic Environment:

It is a commercial thing that can damage corporate incomes and can also reduce stock prices in the market. Increasing high expansion may lead to driving stock valuations lower. It happens because high expansion may lead to higher costs, and it becomes more costly to run a business.

3. Market Sentiment: 

Market sentiments refer to the ability of market stockholders, independently and collectively. It is the messiest category. According to this category, markets are not active much of the time.

4. Fundamental Factors:  

In a productive market, stock values are determined initially by fundamentals. This factor depends on the turnover of the organization. It means that investors can quickly figure out the status of a company, which helps them buy or sell the stocks rapidly. 

Here we have some key fundamental factors:

  • The average growth in the earnings base
  • The recognized risk of the stock
  • The discount price, which is itself a function of extension

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