What causes stock prices to rise & fall?
- Profit forecast & quarterly results may have a strong impact on the share price
- Socio-economic developments may contribute to price increases & decreases
- Inflation & interest can boost the stock price
- Dividend can affect the stock price in both the short and long term
- Takeover rumours may cause the stock price to suddenly rise sharply
What kind of stocks make the most money?
Jan 02, 2022 · High demand for a stock drives the stock price higher, but what causes that high demand in the first place? It's all about how investors feel: Market sentiment toward the stock. Market sentiment...
What's makes the stock market go up or down?
What makes stocks go up: When demand for a stock is higher than the stocks which are currently for sale, its price will increase. While if there are more individuals who are looking to sell their stocks than interested buyers, the stock price is...
What makes Stocks go up in price?
What causes stock prices to increase?
What Makes a Stock Price Go Up?
A stock is simply an ownership share in a physical company. Stock shares allow investors to buy or sell an interest in a company on an exchange through a bidding process. Sellers indicate prices at which they are asking to give up their shares, and buyers similarly post prices at which they’re bidding to buy shares.
What Makes a Stock More Valuable?
Although having more buyers than sellers is what physically drives up a stock price, buyers must be attracted to a stock for that to happen. One of the factors that attracts buyers to a stock is valuation. Companies can be valued in a number of different ways, but earnings per share and P/E ratio are two common factors in the equation.
What Makes a Stock Go Up and Down
Although factors such as earnings per share and P/E ratio are standard metrics of valuation, many other factors can impact whether a stock goes up or down. Some of these include:
How Do You Know When a Stock Will Go Up?
In spite of all the ways to evaluate stocks, the truth is that no one can say with absolute certainty when a stock will go up in value or down. However, in the long run, the trend in the overall stock market is up.
About the Author
After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years.
Stock Market Indicators
Stock Market Indicators are a set of indicators that measure the performance of stock markets.
How a company's profits directly influence its stock price
One key factor which influences a stock's price is the profits which its company generates. As usually when a company posts high profits, investor demand for its shares will increase. As healthy profits are often seen as an indicator of future success.
Inflation's influence on stock prices
Another factor which can influence stock prices is inflation. Typically, the higher interest rates are or the higher the threat of rising inflation is, the more likely stock prices are to decrease. As many investors sell their shares in a panic, fearing an imminent stock market crash.
Deflation's effect on stock prices
Deflation can cause the prices of goods and services to decrease, which can decrease the profits which businesses are able to make.
The effect of uncertainty on stock prices
Pandemics, natural disasters, and wars can also have a negative impact on stock prices. As in times of uncertainty there are always more sellers than buyers.
Dividend rates
Many investors choose to invest a large portion of their disposable incomes into blue chip stocks which offer competitive, regular dividend payments.
Advancements in technology
Companies which are responsible for significant advancements in technology often experience a dramatic rise in stock price.
