Are stock market prices an accurate reflection of the value of your stock portfolio
Are Stock Market Prices an Accurate Reflection of the Value of Your Stock Portfolio?
In order to trade and make money in the markets - either stock or commodities one should have a basic idea of determinants of share valuation prices.
Actual logistics , standard procedures and rules as well as human nature and greed all play major roles.
Consider this as part of the mix when evaluating purchases and sales of your securities.
Timing , perceptions and even sometimes luck play major roles in your quest for your eventual fortune awaiting you.
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The usual description of any market assumes that every trader wishes to purchase or sell a known quantity at each possible price. All the traders come together, and in one way or another price is found that clears the market that is, makes the quantity demanded as close as possible to the quantity supplied.
After all it has been said by the authoritative stock trader W. Haddad of B.K. Labovitch that ultimately economics is supply and demand.
This may or may not be an adequate description of the markets for consumer goods, but it is clearly inadequate when describing security markets. The value of any capital asset depends on its future prospects, which are almost always uncertain. Any information that bears on such prospects may lead to a, which s we know are always uncertain. Any information that depends on its future prospects may lead to a revised estimate of value. The fact that a knowledgeable trader is willing to buy or sell some quantity of a security or commodity at a par
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