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When do you buy stocks and when do you sell a stock? Learn about the factors that affect the ups and downs of stocks

When do you buy stocks and when do you sell a stock

When do you buy stocks and when do you sell a stock?

Investing in the stock market is an opportunity to achieve high returns, but at the same time, it turns out that things may be the opposite as well, as fluctuations and errors in investment strategies may lead to losses in the invested capital, and this stems from the nature of the stock market that is characterized by a high degree of volatility, Where the stock price changes continuously and continuously.

In fact, we must realize that investing in stocks carries with it great opportunities for success and profit, but it also carries risks that exceed the expected returns. Hence, it shows the importance of being cautious and following an appropriate and thoughtful investment strategy based on careful analysis of markets and companies.

So, it can be said that success in investing in the stock market depends on the ability to deal with these fluctuations and make sound decisions at the right time, while taking advantage of opportunities and reducing risks through balanced and sustainable strategies.

World Tech will provide a comprehensive look at these factors that greatly affect the movements of stock prices, as it highlights those main and most influential factors that are an important part of the successful trading process.

What is the stock market?

The stock trading market, or stock trading market, is the place through which stocks and other securities are exchanged, as this market represents an important part of the free market economy, allowing investors the opportunity to exploit capital gains and contribute to enhancing the economic growth of the country.

Although stock investments may carry a degree of risk as a result of market fluctuations, the potential returns are greater than those available in other investment tools. Nevertheless, the investor can manage his investment wisely by diversifying his investment portfolio, and this would reduce the risk of potential loss.

How do stocks work?

1. Common shares: Most of the traded shares belong to the category of ordinary shares, as this category of shares provides the possibility of growth through high share prices and increased profits. The regular stock market is characterized by higher volatility, which makes the prices of these shares change more compared to the preferred shares.

2. Preferred shares: Preferred shares provide regular income through fixed dividends in addition to the possibility of growth through an increase in share prices, as the prices of preferred shares are more stable compared to ordinary shares, and these shares sometimes offer additional features such as the right to redeem shares at specific periods or transfer them into ordinary shares at a set price, known as convertible preferred shares.

In short, common stock offers growth opportunity with greater price volatility, while preferred stock provides regular income and greater stability with some additional benefits.

Factors affecting stock price

The question about how stock prices fluctuate and the factors that affect them may seem simple in the first place, but the answer to it may be more complex than it seems, as stock price movements are affected by a variety of factors that must be understood and understood in order for a person to be able to trade skillfully.

These factors affecting the prices of shares listed on the global stock exchanges vary greatly, and these factors include the performance of the company itself, its financial performance and growth, in addition to the impact of the general environment of the market and the impact of economic and political events.

Factors affecting stock price

**Here are some of the factors affecting the rise and fall of stocks:

  • Economic news and economic reports: Economic data such as: economic growth rates, inflation, unemployment rates, and retail sales can significantly affect the market.

  • Political events: such as government decisions, tax policies, political stability or instability, and geopolitical events can affect the market.

  • Corporate news: news related to corporate performance such as announcing higher-than-expected earnings or unexpected losses that can affect stock prices.

  • Technological developments and innovation: Technological advances and innovations can also affect entire industries and thus stock prices.

  • Supply and demand fluctuations: Fluctuations in the supply and demand of stocks can lead to sharp changes in their prices.

  • Global Events: Global events such as global financial crises, wars, and epidemics, can cause huge fluctuations in the markets.

  • Investors' psychological factors and emotions: Factors such as optimism and pessimism, fear and reassurance among investors can influence their investment decisions.

  • Market Liquidity: The amount of liquidity available in the market can affect price fluctuations.

  • Interest Trends: The interest policies adopted by central banks affect the cost of borrowing and may affect investment and the economy in general.

  • Technical and fundamental analysis reports: Analyzes of financial analysts play a role in directing investors' interest towards specific stocks.

Remember that stock markets are complex and volatile, and a stock price can often be affected by the interaction of a variety of these factors simultaneously.


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