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4 Factors Affecting Stock Prices
Changes in stock prices from up to down or vice versa are widespread. This is because there are factors that affect the share price.
How come? When faced with two main factors, namely fundamental and technical, the symptoms of stock price fluctuations are likely to be seen.
Therefore, many novice investors are advised to understand how to "play" stocks and the factors that affect these shares' prices if they do not want to bear losses.
4 Factors Affecting Stock Prices
1.Company Fundamental Conditions
Every company certainly needs investors to expand its business and keep cash flow running. Therefore, company management needs to make all employees' performance at the company remain stable or even move up during a quarter.
Likewise, with the policies taken, such as acquisitions, mergers, and divestments, you must carefully consider these policies because they will automatically become factors that affect stock prices.
For example, the company you own is merging with another company to increase the two companies' popularity. This raises various assumptions, especially for investors who think that your company is vital because it cooperates with other companies. The effect is that the company's stock price has increased quite rapidly.
2. Symptoms of Fluctuation in Rupiah Exchange Rates Against Foreign Currencies
The next factor affecting stock prices is the fluctuation of the dollar exchange rate or changes against foreign currencies. The consequences themselves can be felt by certain companies that do have foreign currency debt.
If the Dollar exchange rate condition decreases, the public companies will immediately feel the impact, especially those engaged in the export-import sector.
If a decreased export activity can be interpreted as a decrease in sales of the company's products in a country, then the possibility of buying shares is impossible.
Likewise, with the high import conditions in a country, its image will look weak in investors' eyes. As a result, the company will bear more capital to buy raw materials and own operational costs.
3. Investor Buying Trends
This one is understood and considered as one of the factors that influence stock prices. Why not? This buying trend among investors usually has a significant effect and assembles in the world of stock exchanges.
For example, the stock price has increased due to several investors buying stock A, so other investors do not want to be left behind to buy the stock. Meanwhile, if many investors finally decide to sell the shares, it means that the stock price will decline.
This buying trend is also known in two terms, namely bullish and bearish. Bullish is defined as a condition in which the market's stock price has increased and vice versa. Bearish is defined as a condition in which the stock price falls.
4. Stock Price Manipulation and Panic
Maybe you will think that stock price manipulation is a negative thing that You shouldn't do. But believe it or not, such conditions are often done and have become commonplace, especially among large investors who have a lot of capital.
They may take advantage of the power of the mass media to manipulate stock prices. Either to reduce or to increase costs to achieve their objectives. So that, this is also considered a factor that affects the stock price.
Not only that, panic over a change in the image of a company is considered to be another factor that causes stock prices to decline.
This image change can occur due to the spread of negative news in the mass media about the company selling the shares.
Those are the various factors that affect stock prices. Remember, this one investment instrument can't be done randomly, huh. So, if you are still not sure about playing stocks, it's best to rethink the risks.