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The reasons why stock prices go up and down

As far as stock market investing is concerned a question emerging is why do prices of stocks come up and down. An investor is left wondering why prices keep on fluctuating at the spur of the moment. The reason being the prices of stocks fluctuate due to demand or supply in a market. Once people are looking to buy a certain stock, their price is expected to rise in the market. Conversely, if the people are looking to sell a particular stock the price would fall down. In addition to demand along with supply, there are several other factors that contribute to the rise or fall in terms of the share price. Now let us explore the reasons why stock investments are expected to fall down

The news could have an impact on your stock market investments

The moment there is positive news for your company the share prices are expected to shoot up. For example, if the government makes a move to reduce GST of luxury cars from 28 % to 18 % it would be of help to the car manufacturers. This does go on to have a positive impact on the companies who are engaged in the manufacturing of luxury cars and for this, the share prices of these companies are expected to rise.

On similar lines when a company goes on to acquire a competitor, the reducing levels of competition could work out as a benefit for the company as in such situations the price of the share is expected to rise.

Conversely, the moment negative news about a company emerges the price is anticipated to fall. For example, if a car manufacturing company decides to call certain cars from the market because of a manufacturing defect this is going to have a negative impact on the company she prices would fall down at a considerable level.

A dip in earnings might have an impact on stock earnings

Earnings are a vital cog in the wheel for the survival of a company. Analysts go on to formulate a forward earning capacity based on the current earnings of a company. If a wall in the earnings of a company is witnessed there is going to be a fall in the share price.

The global factors could have an impact on your investments in the stock market

In the world of today where global economies connect a volatile shift could have an impact on the share market. Once we consider an example a fall in the oil prices could witness a fall in the share prices at a global level.

These are some of the reasons why share prices move up and fall down in a stock market. In order to make money from the stock market, you need to choose a broker whose commission rates are lower. If you have a certain degree of exposure to a stock market, then opt for the top 10 discount brokers. Their commission structure is relatively lower.