There is a market for partial ownership of companies where buyers and sellers come together it is called stock market. Capital is always flowing to companies that show themselves to be successful by ensuring high returns at a low risk for their investors. Therefore, when the stock market goes through its daily fluctuations, it is moving resources from areas of low yield to areas of high yield. As capital moves away from companies that cannot guarantee investors returns, it moves toward companies that can. However, companies are thus rewarded for being profitable by the chance to increase profits. But that’s not all, there are other characteristics that can make stock change, such as the mood of a shareholder, the competition between traders and the crashes in a company can make a stock market go down. The stock market has its own behavior and this one is unpredictable and depends on the shareholder’s mood. If the shareholders are feeling confidence, then sales and the movement in the stock market will increase, in contrast, if they feel worried about something, sales and movement will decrease. Sometimes, the market reacts irrationally to the mood of the shareholders and it can cause problems, even though it is unpredictable, there is a hypothesis which can predict almost all of its movements. The stock market’s behavior is just like a rollercoaster ride and it reacts on the shareholders attitude. The essence of the stock market is competition and traders are constantly seeking an edge over others, using technology, research, broad strategy and novel forms of analysis. Most attempt to predict price movements by conducting some form of analysis, while others simply try to react to price movements and profit from large price trends. Another class of trader believes he can profit by purchasing shares of valuable companies and holding them for the long term.
In conclusion, the stock market is one of the most important sources for companies to raise money because...
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