Stock market

[fahyil]

What exactly makes a share price rise and fall

[IggyB]

well that can be either company and market performance e.g. company develops a new innovative and amazing product share price would prob increase or the world suddenly has an aversion to cabbages (for some reason) thus shares in a cabbage company would fall.

Alternatively another influence on the share price is simply supply and demand e.g. when many people are buying up a fixed number of shares there are clearly going to be fewer of them available so as supply decreases price goes up (same reason diamonds are expensive - because there aren't very many of them in the world, where as if diamonds were as common as say chalk they wouldn't have a very high price). SO as the price increases many people who have managed to already managed to purchases shares will decided to cash in and sell them off when they decide the price is high enough - thus supply is increased and the price will fall...

hope this makes sense

[vehelpfulguy]

Also share prices are a bit like house prices. Both are only worth what someone will pay for them.

Both the stock market and housing market rely on people having confidence in them.

Sometimes there is "confidence" in the stock market, and people will buy shares (which drives prices up), sometimes people LOSE confidence in the stock market and sell shares (which drives prices down).

This confidence can come and go for all sorts of reasons, such as interest rates, world economy, even the millenium had an effect (many people sold shares before we went from 1999 to 2000 because they thought the millenium bug would cause a stock market slump).

Of course the great art is buying shares when they are low and selling when they are high. Crack that and you have it made.

[Paulst30]

Makes me wish i had took those shares in Yahoo when i had the chance back in the day :P