What really makes the stock and shares rise and fall?

It would be really easy if share prices just carried on increasing, oh what a enjoyable time it would be, but I am confident investors would have no interest in the industry if this was the case, they would just throw as much money in as they could and walk away, knowing that their investment would constantly increase without any intervention at all.

But what makes stock market trading so interesting, is the chase. Not knowing if your investment is going to go up or will go down, trying to determine what is going to happen and eventually discovering if you were correct or incorrect.

So, what really makes the stock and shares rise and fall?

The clear reason is the share price will rise if there are more people who want to buy than sell and the share price will go down if more people want to sell than buy.

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Most of people want to purchase if a particular companies earnings are high, people want to sell if the earnings are low. This is the most observable part to look at for investors.

But when you have a deep look into why more people buy or sell, is when things can get a little complicated and far reaching. Something that happens in another country can cause the price of stock to rise on the other side of the world.

Here are a few things that can cause a rise or fall in share prices. Public opinion, inflation, fuel prices, food prices, interest rates, war, weather conditions, etc.

The butterfly effect in reality comes into play here, an event happening anywhere can have vast results thousands of miles away and without a doubt all over the world, an example of this is war.

So let’s look at the serious and terrible incident that is war. Almost the world over is looking good, economies are blooming and progressively growing, then all of a sudden a war breaks out, it just so happens that where the war breaks out, is where the world gets most of its oil, suddenly people, cannot access the oil, so the oil companies increase the price of the oil that they do have in stock.

A spike in oil prices will raise fuel prices, clothing, car prices, food and many more. This will then drive inflation upwards, next come an interest rate increase. This presses the government to raise interest rates and we have the example above all over again.

So, stock market share prices are affected by various factors that are not easy to predict. But if you study the markets closely, you can start to pick out the trends and start to understand when and where to invest.