Many people have success with stock trading. But stock prices in the market can fluctuate and cause profits and losses to some people. Stocks are volatile, meaning they can go up and down the same as the price of goods in the market. In economics, rising and falling share prices are common because they are also consumer driven.
High demand means the stock price rises, while low demand means the stock price falls. In general, there are 5 factors that influence share prices to rise.
Factors That Cause Stocks To Rise
There are several things that affect the stock price can go up so high. You must understand it as a novice investor, because it will help you make decisions.
Being a stock investor certainly has a lot to learn about opportunities and decision making. We cannot control the stock price, but we can take the greatest opportunity from the stock price in the market.
It’s like shopping at the market, when the prices are scarce. Likewise, the value of shares is understood, when a company has a value that is “scarce” then the share price can skyrocket.
- Corporate Corporations
It is often heard that many companies do corporations. This corporate action is in the form of policies taken by company management. The impact of this corporation will affect the fundamentals in the company.
One example of a corporate corporation is an acquisition. The acquisition is the merger of several subsidiaries into a large company with fundamental policies.
When the company has been acquired, the share price will automatically increase. This is because the company making the acquisition is considered very strong, so it is able to merge several subsidiaries.
- Company Projections in the Future
The factor that has become the spotlight of investors is the company’s future projections. This can be seen from the dividend rate, the level of debt ratio and the level of profit of a company.
Investors will prefer companies that offer a dividend payout ratio (DPR). An important factor in the company’s projection will make the stock price rise so fast.
- Government Policy
Government policies in export and import, debt policy and foreign investment will affect traders who are interested in investing.
- Fluctuations in Foreign Currency Value
The value of foreign currencies tends to fluctuate. In the stock market when the value of foreign currencies is high, the share prices in some companies will weaken.
On the other hand, when the foreign exchange rate is low, import companies will have an increased share value. When the dollar price is falling, traders will take as many opportunities as possible to buy shares.
When the dollar price is high, the trader will sell the shares he bought when the dollar value was small.
- Stock Market Manipulation
There are many manipulations in the stock market that will affect the rise and fall of stock prices. This is done by investors with large capital and using the media to manipulate certain conditions to their advantage.