Understanding the Behavior of the Stock Market

Introduction:

So how do traders and investment firms predict which stocks will pay off big? How do they know when to buy and sell?
The simple fact is there is no simple way to predict the behavior stock market. A number of factors cause rises and falls in share prices through gradual change or sharp spikes. The best way to understand how the stock market fluctuates is to study trends of individual stocks and broad market behaviors.
I’ve created this infographic to help you better understand the behavior of the stock market.

Click on the image below for a larger view.

Stock Market Behaviour 2.0-01

Conclusion

Factors that affect stock prices include: inflation, interest rates, energy prices, oil prices and international issues like war, crime, fraud and political unrest.
Spikes in price are extremely difficult to predict but based on history, the stock market always rises over time and investors can make estimations of how the market will react to different influences and events. Recognizing a trend, hopefully before the curve, in an individual stock or the broader market will help you determine the best times to buy and sell. However, over time, research shows that investing in strong companies with growth potential pays off more than rumors and guesswork!

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  • Edgar roman

    Extremely good information man! thanks

  • tims next student

    helpful and accurate. thanks tim

  • Tim

    Nice, always love some simple graphics to resort to. Thanks

  • Will

    Very helpful and simple to understand.

  • Dustin Leckie

    Wonderful and easy to understand information. Thanks Tim!

  • Brian Weise

    Great post, Tim, thank you!