Syndicate
Analysis of the Economic Juncture of the Moment
In which you must enter or quit
To invest correctly, you don’t only have to study the on going of the companies, but also you have to know how to choose the adequate moment in which to enter or quit from the market. In this charter we will introduce those aspects which are of influence to the stock exchange climate as are the types of interests, inflation, economic and general politics.
To invest correctly, you don’t only have to study the on going of the companies, but also you have to know how to choose the adequate moment in which to enter or quit from the market. In this charter we will introduce those aspects which are of influence to the stock exchange climate as are the types of interests, inflation, economic and general politics.
Stock Exchange Climate
The stock exchange climate is the reflection of the atmosphere that is breathed on the financial markets and that have influence in a great variety of factors. When the atmosphere is of optimism, the investors rush to the markets, action which provokes a rise in the quotations. This rise of the quotation betters the expectations for earnings in securities investments, which increases the fluency of investors. While the stock exchange markets keep on rising, some security owners will take advantage to make some profits by selling their securities at higher prices than when they bought them. These doings make that the systematic rise of the market be followed by small falls. If the market keeps on raising more investors will arrive.
The last investors are usually the inexperienced ones who are used by the professional investors to take advantage of them by selling those securities that will give them more profits. If these sales are important, quotations begin to descend, which provokes a negative stock exchange atmosphere which begins to roll and increase like a snow ball down the hill. This situation usually brings the mass sales of securities from part of the inexperienced investors. When the quotations reach excessively low limits, low prices attract professional investors who begin the rising of quotations and the cycle starts all over again.
A favorable stock exchange climate, denominated “Bull Market” can be detected in base of different symptoms as stated below:
- positive commentaries about the stock exchange that is done through communications media: press, television, magazines and stock exchange reports
- rises in the stock exchange indexes
- existence of more rising securities than those that are falling; also a favorable symptom for a stock exchange climate is the positive reaction of the market in front of good news, if it is accompanied by non-negative reactions in front of the bad news.
Logically, if the former symptoms are of a contrary sign, the stock exchange climate will be unfavorable or with a falling tendency.