10 Responses

1. bzimms

   01|Jan|2010 1

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   it is supply and demand…

   when a bunch of people fear the value of their stock will go down (by some other market force) they panic and sell their stocks. Just like with anything else in the market, when it gets flooded with a lot of supply, the price drops because it is less scarce.

   Many people invest the wrong way. They see the market is doing well, so they decide that they want a piece. Then the market starts to decline and they panic that they will lose their money, so they sell. In actuality, you are better off to invest when the market is down because you can get more shares for your buck. Then sell when the market is high… you see?

2. engineer50

   05|Jan|2010 2

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   Supply and demand. When there are lots of shares being sold and not that much demand for them, the price that investors are willing to pay for them goes down. And vice versa.

   Small transactions by individuals don’t move the markets that much. Its the big buying and selling by funds, banks, pension plans and private equity groups that have the major impact.

3. renzbenton

   07|Jan|2010 3

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   Ok think like this say all the girls in your school like a certin kind of shoes. Only one store sells them. Then one day they become un popular. The girls stop buying them. The store would then have to sell the shoes for cheaper to get them to sell. It work the same way in the stock market.

4. jackie

   09|Jan|2010 4

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   understanding the stock market you have to call 1-800-god- goddddd………….

5. Arron

   12|Jan|2010 5

   start an online business

   1) Yes, although hedge, and pensions funds tend to be the biggest share holders so they have the biggest impact on the market
   2) becuase for you to sell it someone else has to buy. If the prospect for a company doesnt look as good (i.e. economy going into recesion) then the company is inherantly less valuable (so big trading institutuion will be willing to pay less for it). If you want to sell you must move the price down or up to where there is someone willing to buy that volume.
   3)the price of your stock doesnt really matter untill you choose to sell it, so the stock price simply reperesents where someone in the market is willing to by that particular stock at that moment in time.

6. jimmymae2000

   13|Jan|2010 6

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   Suggest you read Peter Lynch’s book “one up on wall street” then you’ll be an expert.

7. chrome

   14|Jan|2010 7

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   good questions - they get to the whole point of the stock market.

   let me give em a try:

   1. yes, it means that people, for what ever reasons they individually have, are trying to sell their stocks, the people who are in turn buying those stocks are willing to pay less and less for that privilege. That is the bottom line. the “why’s” for both seller and buyer are complicated and varied.

   2. sort of a variant of supply and demand. there are more people wanting to sell even if the price is lower than there are people willing to pay more for the stock

   3. In fact you stock really only has a measurable value when you convert it back into dollars by selling it. You lock in your gains or losses only when you make the sale. Up till then they are only losses or gains on paper. The optimist hopes that the lower selling stock will eventually turn around and begin selling for a higher price.

   like every thing else that is bought and sold: stocks, houses, pop corn, things are only worth what someone else is willing to pay for it. It takes a willing seller and a willing buyer.

   hope this helps

   gudluk

8. likewhatever

   15|Jan|2010 8

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   The questions you’ve asked does not have any particular answer, matter in fact no one knows, not even the shareholder why know it goes up and down.

   However, there are factors that might influence a change in your stocks, such as, weather, politics, increase in currency, subsidiaries, etc. That is why keeping an eye on the news can help you determine whether your stocks will change for the best or for the worst.

   As for your last questions. Stocks can change it the companies “Market Capital” drops, or if a large shareholder decided to sell his stocks for a lower price, the it’ll drop.

   If you want to learn more about investments, then goto

   They’ll go more in depth. Btw, the whole concept of stocks is thorough based on “supply and demand”.

9. OPM

   17|Jan|2010 9

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   The above people are close, but I am a financial economist and maybe I can help.

   1) To sell something there has to be a buyer also, so if people are “selling off stocks,” there is another group “buying up stocks.”

   2) If you want to sell more than a buyer wants to buy then you will drop the price until a buyer cannot resist the trade. So by selling you can push the price down depending on how badly you want to sell and the other person wants to buy.

   3)If IBM’s share priced crashed today to one penny per share it would still have the same intrinsic value it had prior to the crash, but you couldn’t sell it for that price. If people were only willing to pay one cent per hundred shares then that is the best price you can get even if it is worth $50 per share. It is rather like the real estate market, if everyone in your neighborhood suddenly got job offers elsewhere and put up for sale signs, even though you were not selling your home your home would be worth less if you did try and sell because there are a lot of motivated sellers for a given number of buyers.

   Stock prices fall if the number of shares offered for sale increases while the cash available to buy remains the same. Likewise a decrease in cash available to buy while number offered remains constant will also cause a fall. If the cash falls and the number offered increases you could get a big fall.

   Like your house, your stocks are only worth less if you actually sell them and get the lower price. Stocks are worth their intrinsic value. If you paid more than their intrinsic value you will eventually have to lose money. If you paid less than their intrinsic value you should not only make the fair return, but also extra money as people realize the stock price was too low in error.

   I think what is happening is that now that the dollar is worth less, substantially less, than it was six months ago, foreign holders of US assets are taking their money back by selling their US assets. The run up of the dollar under the Clinton Administration led to low prices across the board for Americans and virtuous growth factors. It is gone now. Eight years of Georgie and we are beginning to slide into a deep morass. It is avoidable, but the next President, whoever he or she is, will probably have to lose the re-election to fix the problems because it has been pandering to the public which has gotten us into this pickle. This President has over spent the nation’s resources.

   Will the stock market continue to fall? No one knows. I am invested in the market, but I am invested very carefully. I would not consider most stocks because the price for them is too high, but there are wonderful inexpensive stocks out there.

10. ebmid2

    18|Jan|2010 10

    collectible webkinz

    1) Yes.
    2) Say there are four people who all want to buy stock in a company, but the company only has two shares. Person A would only be willing to pay $1 for a share of stock. Person B would be willing to pay $2 for a share of stock. And people C and D would each be willing to pay $3 for a share of stock. In that case, people C and D would each get a share at $3. Then later if person D decides he doesn’t want the stock anymore, he can sell it. But he won’t be able to get $3 for it, since there isn’t anyone else who is willing to pay $3 for it. So he does the best he can do, and sells it to person B for $2.
    3) You’re person C.