Why does stock price go up and down

However, it seems like, at any given moment I, and anyone else, can buy or sell any number of shares at the current stock price. So what is the actual mechanism that determines the change in stock price? It doesn't seem like the stock price would move up unless all available shares were already purchased, or down unless there were people willing to sell shares for less than the market asking price at any given moment.

The answer is that stock prices are indeed determined by supply and demand. Advertiser Disclosure. Here Are the Reasons. By John Csiszar November 3, Building Wealth. Need Retirement or Investment Advice? View Offers. About the Author John Csiszar. After earning a B. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm.

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Here's a look at its third-quarter earnings results and what to consider before investing. By John Csiszar. Dividends are a way for the company to share its profits with investors.

Here are some of the best dividend ETFs to consider adding to your portfolio. A discount rate is the rate investors use to calculate the present value of future cash flows. Higher discount rates lower the valuation investors are willing to pay. An investor who demands a 12 percent return is willing to pay less for the same asset than an investor who requires only an 8 percent return.

Paying a high multiple initially can wipe out the return from dividends and earnings growth if the multiple meaningfully compresses over time. Stock prices can move for any number of reasons over the short term. Political issues, economic concerns, earnings disappointments and countless other reasons can send stocks lower or higher.

But over the long term, stock prices will be driven by just a handful of fundamental factors such as earnings growth and changes in valuation. Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision.

In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. How We Make Money.

Editorial disclosure. Brian Baker. Written by. Bankrate reporter Brian Baker covers investing and retirement. He has previous experience as an industry analyst at an investment firm. Baker is passionate about helping people …. Edited By Brian Beers. Edited by. Brian Beers. Brian Beers is the senior wealth editor at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money.

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