Friday, August 29, 2008

Stocks Fall and Rise

I'm not an investor and don't claim to be one. One thing that I always find interesting is how the stock market seems to rise one day and fall the next day based solely on the news. I can understand how this would work regarding the future's market, but not stock. Stock is a portion of ownership in a corporation. The value of that stock is determined by the market demand for the portion of ownership in the company. Market demand is determined based on the current financials of the corporation, such as profit and margin, earnings per share, as well as the future projections. What does the daily fluctuation in jobless claims, personal income, and misery index have to do with my choice in investing in a company. If I am smart, I research the company itself before I buy or sell, not wait for the latest fluctuation in news.

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