Why do stock prices go up and down?

I'll give you the short answer!

Stocks go up because more people want to buy than sell. When this happens they begin to bid higher prices than the stock was currently trading. On the opposite side of the same coin, stocks go down because more people want to sell than buy. In order to quickly sell their shares, they are willing to accept a lower price.

That said, we'll take a look at the various reasons that cause traders to want to buy or sell a security.

And 'possible to watch the financial statements of a company and determine what the company is worth. Investors who take this approach to examine the company says is "fundamental". They try to find an undervalued stock - one that is selling below is "accounting". Operators feel that sooner or later others will realize that the company is worth more than the current price and start offering it up.

Another investment psychology is called "technical approaches". This is when traders closely examine charts of the past performance of the title in search of trends that we feel will be repeated in the near future. These traders look at what is happening in the market as a whole trying to anticipate the effect it will have on a single title.

Sometimes companies trade at half their "book value", while other times you can swap a double, triple, or even higher. When this happens, it can create some sudden and large price swings. This volatility is what makes it possible to make large profits in the market. It 's also responsible for huge losses.

The stock market is essentially a giant auction in which the ownership of big business is for sale. If some investors think that a particular company will be a good investment, they are willing to bid the price. Similarly, when many investors want to sell a security at the same time the supply will exceed demand and the price will drop.

Watching the stock market can be likened to watching a ball bounce. It goes up and down and then goes right back up. This can be extremely frustrating for many investors who want to go into a stable pattern. And 'this volatility in the market as a whole and in individual stocks that profits of traders from experts. Without a lot of experience, the individual investor needs a proven source of information and direction. The daily stock market recommendations http://www.stock4today.com be able to supply this need.

Many investors (as opposed to traders) have a philosophy of "buy and hold". This would work well in a growing market. Unfortunately, the stock market does not go in a straight line. There are highs and lows that frustrate this type of investor. Today, many investors have become "traders" who buy and sell on the fluctuations of the market and individual securities. These traders make money in any market - up or down!

Another well-known investment http://www.fool.com site lists the following reasons for stocks to go up and down:
Why Stocks Go Up

* The sales growth and profits

* A great new president hired to run the company

* A new product or service is introduced

* The most interesting products or new services are expected

* The company lands a big new contract

* A great review of a new product in the press or on TV

* The company is going to divide its shares

* Scientists Discover the product is good for something else

* Some famous investor is buying shares

* A lot of people buying shares

* An analyst upgrades the company, changing its recommendation, for example, "buy" to "Strong Buy"

* Other titles in the same sector up

* Fabric of a competitor burns

* The company wins the case

* Most people are buying the product or service

* The company expands globally and starts selling in other countries

* The industry's "hot" - people expect great things for good reasons

* The industry's "hot" - people do not understand much, but they're buying anyway

* The company is acquired by another company

* The company could be acquired by another company

* The company is going to spin off part of itself as a new company

* Rumors

* For no reason at all

Why Stocks Go Down

* Profits slip, sales slip

* The top executives leave the company

* A famous investor sells shares of the company

* An analyst downgraded its recommendation of the title, maybe from "buy" to "hold"

* The company loses a major customer

* A lot of people are selling shares

* A factory burns

* The other titles in the same sector falls

* Another company introduces a better product

* There is a lack of power, then not enough of the product can be made

* A great cause is brought against the company

* Scientists Discover the product is not safe

* The fewer people are buying the product

* The industry used to be "hot", but now another industry is more popular

* Some new law might hurt sales or profits

* A powerful company entered the business

* Rumors

* No reason at all ......