п»їMonique Frances B. RapaconBS Accountancy IIA
How the stock market operates
Wall street game is a place where you can purchase and sell shares within a company. Each time a company makes shares available for the public to buy they are known as stocks which is what you are trading. In most cases whatever you get when one buys a stock is an extremely small part of the company. You are an owner of that business and as this grows the corporation should be valuable meaning your stocks should be a little more valuable too. At least that is the theory but in practice there are other items that impact the stock cost as well. Like anything that has been bought and sold stocks are be subject to the law of supply and demand, because the number of stocks and shares is limited if the number of people who want to buy all those increases the value will go up. On the other hand if the number of buyers declines, or maybe the number of people who wish to sell improves then the selling price will go down. In theory the need is based on how profitable the business is but in practice it really is based primarily on targets of the particular company can do in the future. Considering that the goal of investors is to become the maximum return on their purchase the goal is to choose the stock prior to price goes up and then to trade it prior to it goes back down. Because of this you have to look closely at what the benefit of the firm you will be buying stock in will be in the future. That is why you frequently see the cost of the share go up prior to an earnings announcement then decline even if the earnings were higher than predicted. People bought the stock in the expectation of good profits which drove the price up and then offered when the very good earnings had been announced because it was very likely that the stock's value acquired peaked, by least temporarily. One thing that confuses a lot of people when the buy the stock market is they don't receive any of the business profits. All things considered as a great owner you will normally be prepared to. In a few situations you will,...
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