What is the stock market?
The stock market is a platform made available for any qualified person to exchange stocks, bonds, or other commodities.
In order to trade in the Stock Exchange Market, you’re required to have an account with a brokerage firm which is very easy to do online.
Most brokerage requires a minimum age of 18 in order to be qualified, which does make sense because that’s when you’re no longer a minor.
Some of the factors that can affect the stock market
Stock market volatility is something all investors use to their advantage, but we don’t hear them talking about that enough.
We usually hear people talking about penny stock volatility, and how dangerous it is to trade them, yet the entire market is volatile.
With this being said, let me share why the market is on a slippery slope depending on how you invest.
The stock market movements these past couple of years
If you have been investing in the stock market for the past few years, or have been following it at least, I’m pretty sure you’ve seen so much.
Any negative event can have a major negative impact on the market. The pandemic had crippled many businesses and companies, most of which were listed on the stock market.
As they were struggling to stay alive, their stocks were fighting as well and investors like us were going crazy watching our portfolios being hit repetitively.
The pandemic itself…
Any global disaster can be detrimental to the market as in the case of the coronavirus-19 outbreak.
Unfortunately, so many investors have lost money during this pandemic in the market. Unbelievably, but true, many others have made so much money during this period of time as well.
In essence, some are losing and some are making profits, although it’s more like the riches are getting richer and vice versa type of thing.
The pandemic had shown to be a massive factor in deciding the fate of the market trends. I remember before a vaccine was made available against the virus, investors did not know what to expect as the market was struggling.
After the news of a vaccine being made, we saw a little progress, when the vaccine came out and started being given to people we were also able to see the difference in the stock market.
Decisions made by a company can be crucial to its progress. For example, let’s say company XYZ decided to lay off some of its employees, this action itself is enough to see its investors go into a selling mode, which could drastically decrease the company’s value.
On the other hand, some companies use this strategy illegally to increase their value. Sometimes they release news that is able to attract investors in order to make profits themselves.
Investors have a tendency to buy shares when there’s good news about a company which then increases its volume and price simultaneously.
companies’ performance can affect the stock market
Making profits are the main reasons we buy shares, if you own shares from a company and this company is not making profits your portfolio would suffer as well.
In order for you to make gains, the company has to be in good shape financially. Therefore, when you’re buying shares you need to know about the company first, and you need to conduct your research.
Political views or decisions can be a factor
Stimulus checks news: When the federal government of the US decided to send checks to low-income families during the pandemic, the stock market did better as well.
Additionally, when a new president comes to power we usually see some movements in the market, either positive or negative depending on the sentiment.
That shows you the sentiment of the stock market does not have any fixed prediction factor, as long as it’s something that is positive for the economy you should look forward to some movements in the market.
To conclude, the stock market is very volatile because there are countless factors that are able to affect its movement.
The more you’re aware of how it works the more is your chance of surviving in it; and yes, I say surviving because not everyone is able to make it successfully in this market.
It’s a good idea for you to teach yourself first, read blog posts, and watch videos so that you know how to go about it.
Good luck on this journey!
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