Stock prices are affected by many variable

QUESTION

Factors that Influence Stock PricesStock prices are affected by many variables. Understanding thesevariables and keeping a close watch on events are important to everytrader and analyst. Business fundamentals play a huge role, but, sodo elements of human psychology (fear, greed, and investorperception).Internal factors relate to the company itself. Examples:an announcement of poor or favorable earningsearnings that are more or less than expectedearnings dividends,major layoffslabor problems,new products,management issuesaccounting errorsscandalsmergersExternal factors relate to world or national events. Examples:political upheaval or warinternational currency crisisweather conditions that affect salesthe Fed’s adjustments of interest ratesemployment figures that were higher or lower than expectedAdditionally, industry information may impact an individual stock. The fortunes of an industryas a whole tend to affect individual prices. Bad news, however, about one company may bebeneficial to another company.By analyzing these factors, you will often learn a lot about why a stock did well or why itperformed poorly. Being aware of these influences will help you anticipate future stockmovements.

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