Stock Market Up? This Might Be Why

It changes daily and is one of the most exciting ways in which you can invest money. The stock market is drawing more of an audience than ever, but in order to truly find success with stocks and shares you need to understand how the marketplace functions. While you are likely to find story after story about what contributes to a market crash, little is discussed about what contributes towards a boom. That is until now, as this article takes a long look at why you are seeing the famed “Stock Market Up” headline in the financial papers.

Inside events

Inside events are events that occur within a company and alter its fundamental foundations through direct and indirect methods. Common examples of an inside event include the appointment of a new CEO, a regulatory approval of a new item or service, and the release of a new product. Positive inside events will work to boost a company’s stock, while should the improvements be considered big enough they can even work to improve the sector as a whole.

Outside events

While the key determining factors will always come from within the market, other factors outside of the stock market can help drive the market up. Social, political, and economic events can occur which can improve the look of the stock market ten fold. For example, the wide spread adoption of the internet in the US bank in the late 1990s and “credit collapse” recovery in the United Kingdom helped push the market up considerably.

Hype

In many ways nothing can substitute for a good marketing campaign. Those who work for companies and those whose job it is to solely pump up stocks for gain can employ the hype machine for the market’s benefit. What can contribute effectively to hype varies, but positive reports, Internet discussion, news reports, press releases, bulletin board notices, and stock market newsletters are all considered main ways in which a stock or market sector can be hyped. Hype can be a tremendous tool to push the market up after a long time in the doldrums, as it gives investors something to get excited about in the future.

Cash influx

Everyone loves new money and the stock market in many ways is no different, when an increased amount of investment hits the market, the stock market will benefit across the board. New industries will get help and more importantly many investors will start to see older sectors get a new lease of life. Simply put, a cash influx can push the market up to no end.

The only way is up

As an investor you’ll largely hear about the doom and gloom surround the stock market. With a story of how an investor has lost it all in a single trade not being too far from earshot. But don’t think its all bad news all the time, when you see those “Stock Market Up” headlines rejoice, as thanks to this guide you know understand what it takes to make those headlines a reality.

Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.

Alexander Bowring is a London based writer and a Southampton Solent University Screenwriting graduate. He has worked alongside TV personality and Telegraph feature writer Alison Cork, whilst also having produced content for ITV, This Morning, Canvas8, Who’s Jack, Alison at Home, and Bonallack & Bishop Solicitors. Alexander also has a keen interest in investments.

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