The Importance Of The Stock Market

1893 Words 8 Pages
Register to read the introduction… A big method economist use is something called the technical analysis method. People that use this are often called technicians or chartist because they use charts to find trends in stocks. Chartist closely study the past stock charts of firms and find trends. (Stock Price Analysis) They believe that the stock is mostly psychological, they try to predict what crowd of investors are likely to do. If they can jump the gun they’ll buy the stock while it’s cheaper, and the price of the stock will then be pushed up by the crowd that’s trying to buy a stock that is supposed to be going on an upward trend. (Malkiel) Of course chartist are only looking at what firms have been doing in the past, but they believe that past can reflect information about earnings and dividends. Earnings and dividends generally project the firm’s current situation. Chartist are looking for trends because a stock that is rising tends to keep rising and one that is falling will continue to fall. …show more content…
He described why they are successful and unsuccessful. This was the most helpful piece of works for it’s great explanations, and because he led me to other helpful references.

"Security." Investopedia. N.p., n.d. Web. 26 Oct. 2013.
A Security represents a stock or bond. They are divided into debt securities and equities. A debt security is the money that is borrowed and must be repaid. An equity represents ownership in interest that is held by shareholders. “Stock price Analysis” Stock Price Analysis N.p., n.d. Web. 19 Aug, 2013 Great introduction of the two theories I wrote about. The site talked about the goal of each approach.

Watson, Sam. "What's the Basic Function of the Stock Market?" PBS NEWS HOUR. PBS, 3 Aug. 2009. Web. 26 Oct. 2013. Sam Watson explains why it matters to a company why their stock goes up and down. Also, It is answered how buying a stock would contribute health to that company

"What Is the Stock Market?" Stock Market. N.p., n.d. Web. 26 Oct. 2013.
It is explained what happens when an investor buys a stock of company. As a company makes money, its value goes up. Only a business corporation can issue a

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