Investing In Stock Market
April 6, 2009
Stock Market is place where stock company sale and purchase. With main principle that every company always want added value for their shareholder.So, company stock prices which often going up become make control of the company in their work transparency. if the company do cheating,automatically stock market will left it company.The principle of stock value in normally always up become make advantage (gain/margin) that be expected by investor. This margin become make advantage value that seeking by investor in future as their consequence choose investing in stock Market.
But,there is question, why stock market sometimes going up but sometimes down? There are many factor that effect of the stock value. Some factors that make effect on the stock market are there:
Liquidity Factor Too much money that circulating in the world / in a country could cause increase of stock prices.Conditions of excess liquidity in a market, ex:because the money flood in, can impact the stock price to soar (increase)Large liquidity conditions in stock market can be:
a. Excessive investor optimism about the prospects of a country
b. Low interest rates cause investors seek other alternative from their investment
c. The performance of the stock during the last few years, so it encourages more players to enter the stock
d. Abundant availability of funds on the fund manager.
Investor Sentiment
a. In the short term, investor sentiment role at most. At the time investors are optimistic on the market, without fundamental changes and significant liquidity, the market also can make many change.
b. The flow of funds into the market determines is the main performance of shares in the medium term (up to several years).
c. Fundamental factors determine a company’s stock price in the long term.
d. Determine a recommendation based on the horizon investors is important.
Companies Fundamental
Profit company in the future,Company’s profit growth, ROE (Return On Equity) of the company If the company have high profit, growth,and ROE of the company, so it make company stock price is larger.
Industrical Structure
If the industrial structure is weak, it make the profitability will be moved by new entrants (the competition more stringent), suppliers, buyers, or product substitution.
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