Everyone today talk about the stock market and its changing conditions. People now take more interest in stock market investment as compared to the past years. The reason of the increase in interest in the stock market is the high profit with minor investments. There is no other source, which provides that much earnings. However higher the risk than higher will be the returns. To earn something you have to lose something. There is very uncertainty in case of stock market operations. There is success in one day and the next day can be the day of failure. The market does not remain constant.
There are many things, which case the market uncertainty. Some if these are as follows.
1. Inflation in the country
2. Rates of interest
3. Amount of earnings
4. Prices of oil and other power sources
5. War in the world
6. Crime rate
7. Political situations
These factors act a lot in the stock market and affects its operations and cause uncertainty in the market. Therefore, there always fear of downfall in the stock market. The investors always keep a close eye on these factors of insuring their success in the stock market. There is no other procedure of secure your investment. Generally it is perceived that market is efficient which mean everyone have the same access to each information. This does not happen in actual life because not all the people have full information access. This theory made keeping in view a broad concept of market in mind.
These factors are different for different investors. One factor can have great importance for one investor but on the same hand no importance to the other investor. This all depends upon the nature of investment and market position.
Inflation is a very dangerous factor for the stock market. It can destroy the whole market or a specific investment within few days. It is also very bad for a country’s economy.
Rates of interest also affect the market very badly. They have the direct impact on the investment commodities. If the rate of interest on loans is higher than the gain on other, investment like purchase of shares than investors put all their investment in the loans or banks are the remaining market will suffer.
Earnings are also very critical factors for the investment purpose. The investor will always go before the commodities, which are offering higher amount of earnings, but these earning also bring higher risks. Higher the risks higher will then return. Investor sees the earnings or gain but over look, the risks, which are with these earnings and as the result, they lose the investment because they do not understand the risks.
Prices of oil and other power resources are also very vital in market uncertainty. All prices are set on the base of these things and the price goes up and down very rapidly, which is the main reason of market uncertainty.
A wise investor will always keep in mind all these factors before making an investment in the open market.