Markets in Minutes: Episode 1
Updated: Sep 20, 2020
A brief look into the factors that affect stock prices, and how to use them to make your investing decisions!
What's the basic aim of trading stocks?
"To buy shares of a company that you believe will move up in price over time"
How do stock prices move?
"Stock prices are affected in two ways, what we call the MICRO Level and the MACRO Level."
The Micro Level refers to factors within a company or its market that can change its stock price (profits, revenues, market potential for growth).
The Macro Level refers to factors outside a company that can affect its stock price (global issues, economic/health shocks, geopolitical problems).
What do you need to remember about these two levels?
"The Macro Level overpowers the Micro."
In other words, it doesn't matter how good a company is on its own if overall sentiment (or the way investors feel around the world) is weak . So:
Great company + Great market sentiment = Stock price UP