Why Does The Stock Market Fluctuate?

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

You don't have to be a seasoned investor to know that stocks go up and down - just listen to the news or walk through Times Square in New York City and view the board with all of the stock market updates. But despite the fact that this is normal and something all investors should expect, a common question surrounding the topic is why? Why is it that stocks continue to go up and down every day, each week, and so on and so forth?

Truth is, one of the main reasons that the stock market fluctuates is because of an idea that you're probably familiar with - supply and demand. Essentially, when there is more demand for a stock and more people want to buy it than sell it, the price will naturally go up. On the other hand, if more people are trying to sell a stock than buy it, the price would be expected to fall.

Now we know your next question - what makes people want to buy or sell a particular stock? Ultimately, investors look at a company and try to determine its worth before deciding if it's the right company to invest in - for example, they may consider if there has been positive news or negative news surrounding the company lately. In this case, one of the main things that investors consider is a company's earnings. Companies that go public must report their earnings once each quarter, which is how investors can get their information about whether or not a company is on a good path or a bad path.

Although these ideas are some of the top contributing factors to why the stock market fluctuates, keep in mind that no one can really say for sure why stocks change and at the frequency that they do.

If you're new to investing, we know that the cause behind stock market fluctuation can be confusing despite the amount of research you do on the subject. That said, we want to help clear up any questions you may have about the stock market, as well as work with you to figure out an investment strategy that will work in your favor!

To get started with an advisor here at American Investment Planners LLC, please give us a call at (516) 932-5130 or email info@americaninvestmentplanners.com - we'd love to hear from you!