What determines the price of stock? The very basic thing factor is demand and supply. More demand, higher the price. Less demand, lower the price. Then, let's say, what determines demand? Well, everything comes under two umbrellas: Good news or Bad news.
Good news
- Rise of company earnings
- Growth of company
- Good analysis from analyst
- Presenting new techonology
- Kudos from the press
Bad news
- Terrorist attacks
- Downfall of company
- Lawsuits from rival company
- Market scandals
- Laws regulating firm production
By buying stocks, people are investing their money into something that they never know what the result would be. The only thing investors can do is to speculate the future stock price, and to predict the stock price, they have to consider all the good and bad news (information). They want to buy a stock that steadfast, productive and in long-run. No one wants to invest in a fluctuating and limited-ability companies.In short, so many things can affect the stock price, but in fact, it's all about "good news? bad news!" Investors will sit down all day searching for news and information that may influence their stocks. It is reasonable to say that in stock market, information is everything.
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