What makes your stock prices fall?

Just as prices for all commodities fluctuate depending on several factors, stock prices in the stock market also vary depending on various factors. It is difficult to name only one or two factors that determine changes in stock prices.

In the stock market, the most basic rule in the economy – supply and demand – plays a very important role. Stock prices are directly affected by stock market trading trends. When more people sell a particular stock, its price falls, and it rises when more people buy that stock. It’s hard to say for sure about stock market trends, but an experienced stockbroker will be able to give you a pretty good idea of ​​how the market works. However, do not blindly follow his advice, try to do some research yourself.

One of the most important factors influencing stock prices is news. The good news about the company is relevant to the price increase because the interest of buyers will increase. A negative press release could destroy the potential of stocks. However, more important than the news itself is how the company as a whole works.

When you try to estimate the value of a company from the value of its shares, you are making a mistake. To determine a company’s value, a company’s market capitalization is more important than its shares. The total number of shares outstanding in the market needs to be multiplied by the stock price to calculate the company value or market capitalization.

The company’s earnings per share in the last quarter are the company’s earnings per share. Each open company must publish a quarterly report showing the earnings per share of the company. When deciding on the state of a company this is an important factor and it influences the buying trend in the market which leads to an increase in the stock price of that stock. So, if you want to profit from your investments in the stock market, you should pay attention to the quarterly reports of companies and explore various options before buying a particular stock.

The P / E ratio is the price / profit ratio of a company, which will give you a good enough idea of ​​how the value of the company’s shares is compared to its profit. If the stock price is too low compared to the company’s earnings, then the stock is undervalued and it is likely to rise in the near future.

These factors are some of the factors that affect the rise and fall of stock prices, but there are other factors that affect market trends and stock prices. There are certain stock factors that also strongly influence the price of a particular stock. So before you invest money, be sure to do some independent research.