| To become financially successful stock market | | | | for oil around the world would drive up the price of |
| investing, there are absolutely two things that you | | | | oil. Shareholders who have invested in oil-related |
| must get correct: you must be able to correctly | | | | stocks would then likely profit from because the |
| identify both the timing and trends of the market. | | | | price of the stock would almost surely rise. |
| Trends show how the stock market or certain | | | | Additional Factors |
| aspects of it perform over time. Timing relies largely | | | | External factors that can impact (positively or |
| on the investor's intuition and ability to interpret | | | | negatively) the trend of stock market performance |
| economic indicators to determine when is the right | | | | include seemingly unrelated life events such as natural |
| time to buy or sell stock. | | | | disasters, security threats, wars, Presidential |
| In general, the more experienced and knowledgeable | | | | announcements, Congressional decisions, |
| an investor is, the better he is likely to be at each - | | | | unemployment statistics - as well as a host of other |
| these are key to maximizing your investment | | | | more obvious (and directly correlated) economic |
| opportunities. | | | | factors. |
| Trends of the Stock Market | | | | Of course, influences that affect the state of the |
| The market trend refers to long term increase or | | | | economy are extremely variable and unpredictable. |
| decrease of the overall price of a company's stock | | | | For instance the terrorist attack in New York on |
| during the course of months or even years. | | | | September 11th, the collapse of the housing market, |
| When you consider the overall movement of prices | | | | and even natural disasters like the BP oil spill can all |
| over this extended period of time and extrapolate | | | | make for "nervous" investment decisions. |
| general information about the performance of the | | | | Timing |
| stock, you are identifying its trend. | | | | Learning when the right time to buy, sell, or hold onto |
| The downward sloping movement of the market is | | | | a stock is probably the best skill you can hope to |
| known as a "bear market," while "bull market" is | | | | develop as an investor. You cannot make money if |
| referenced to describe the stock market when | | | | you do not know when to take action with your |
| prices move upward. | | | | stocks for maximizing your profits. |
| Influences on Price Fluctuation | | | | Investors use a variety of strategies to determine |
| Supply and demand are the two greatest | | | | when the timing is right, but the basics include paying |
| determinants to product prices. High demand with a | | | | close attention to market swings and the economy in |
| restricted supply will result in a rising price. But when | | | | general. (Some claim that a monkey throwing darts |
| the opposite occurs - demand is low and supply is | | | | at a "buy" and "sell" target will be just as accurate as |
| high - prices fall. | | | | investors and economists, but savvy investing |
| Supply and demand of specific products or resources | | | | strategies CAN be learned.) |
| fluctuate over time, leading to changes in investment | | | | Evaluate current and past performance of the stocks |
| behavior. | | | | you have, and use past trends to help predict future |
| For example, a worldwide oil crisis could drive up oil | | | | price movements. Then make the tough "buy," "sell," |
| prices around the world. Such an increased demand | | | | or "hold" decisions. |