WHY STOCK/SHARE PRICES FLUCTUATES? WHEN TO INVEST?

KNOW WHY STOCK/SHARES PRICES FLUCTUATES AND WHEN TO INVEST IN SHORT AND SIMPLE WAY

Share market helps you to increase your wealth. The main goal of people in share market is to earn profit by trading and investment. But people are afraid to do trading because of continuously changing of share’s price. Due to the instability in share price stops you to do trading in stock market. To understand the mechanism of consistently changing price, we give you a brief on increasing or decreasing price of shares. Once if you understood the factors affecting the price of shares then you will aware of the factors.

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Stocks market prices are influenced by demand and supply. When the demand of a share is more than the supply of share then accordingly the price increases and when supply of any share is more then the demand of that particular share decrease the price of that share. If there is more gap between demand and supply, there will more change in price. 

For example: when many traders buy a single company’s share then its price will increase and when many traders sell a particular company’s share then its price will decrease. Now let’s know other factors also.

MAJOR PARTICIPANTS OF STOCK MARKET WHO INFLUENCE STOCK PRICES

There are many participants but majorly there are three:

1.Retail Investors: Stock market is very much influence by the mindset of retail investors like; if retail investors mindset is positive to invest in any sector or company then the price of that sector or company’s share will reacts positively and if their mindset is negative then share price will also reacts negative.

2.Institutional Investors (like mutual funds, govt. agencies etc.): They also influence share market as same as the Retail Investors.

3.Advisors/Credit Rating Agencies: These agencies give advice to the retail and institutional investors and retail and institutional investors’ action towards share market are according to these agencies’ advice.

THE RELATED NEWS/TRIGGERS

News related to a sector or company makes impact on the share price. If company have some good (like growth, acquisition of other company etc.) its share price will increase because all investors and traders will purchase share of that sector or company, it increase the demand of that and accordingly the price will increase. And if there is any bad news related to a particular sector or company then it will work negatively. 

You all must have heard about Insider Trading which was very similar to  this only but the sources were from inside the organization and thats why it is illegal and banned in Indian stock market (SEBI) .

(We'll cover this very interesting Topics,Insider Trading, in Our Upcoming Articles soon )

 COMPANY'S EARNINGS & PROFITS 

(THE FUNDAMENTAL )

Company’s earning attracts and distract the investors. People invests in a company for a long - term according to company’s long - term earning. A company that is making good profits attracts more investors towards its share which increase the price of that share. Company listed on stock exchange have to reveal their quarterly earning that is called quarterly report. A company’s report shows a good growth or good earning it  brings more demand.

CONCLUSION

Now, when you have understood the factors affecting stocks market , go ahead and open your demat account and start your trading and investment. So what are you waiting for go and grab your opportunity.

Happy Learning

Team,The Successlogy