Some of Market Movers are More Important than Others.
Whenever you buy a stock of any company, you are actually making your investment in the future’s growth of any company. The prices of the company’s stock may fluctuate up or down , on account of, any factors. That factor may be economic or broad market factors. They might, in some way, affect the company.
If there is any possibility of a rise in inflation , that possibility will put the whole market on bearish trend,
The Federal Reserve, that is considered the sole, most important agency for the whole investors on the stock market. Since market directly affected by its actions. Whenever FED expresses its concern. An abrupt slum is experienced in the market.
The news about the increase in interest is bad omen for the business activities. The higher the interest rate the lower the business activities , and slum in business activities directly affects the stock market as well stock price.
Though you may think that the market always moves in a balanced manner,, it doesn’t turn to be right always. Two important factors like greed and fear make the stock price move. This can be seen in supply as well as demand for the stocks. Balance in supply aw well as demand always sets stock prices. Whenever demand of any stock is high and its supply is low in the market , an increase in the stock’s price can be seen. But if supply of stock is high and there is low demand , the stock price will fall.
Similarly, the expected announcement about the economy of the any country that, it will grow at a strong rate is generally a bad omen for the market. In this situation, there is a probability that the Federal Reserve will not or less apt to cut down interest rates. The Federal Reserve wants to avoid fueling inflation and overheating economy.
Tricks For the Investers’Understanding:
Investors should have understood that which kind of market moving factors could directly affect the stock and company.
They must have understanding to what extent a stock price goes down .Usually investors forget one thing that the stock price has had no guarantee. They might lose their whole investment.
Investors must have understanding of market momentum. It ccan be a strong force in a stock market , but it proves wrong sometime, because momentum is usually built on the base of emotion instead of logic.
How Can You judge about Problem or Opportunity?
The answer of this question is that you do your homework and study the company thoroughly and check its annual report, products.
While you don’t find proprietary data of any company in common public forums.
You try to get a sense if the management of the company has had a sense , what is important for the company’s growth, in the future. Company future growth will produce the profit to give the benefit of its shareholders