REUTERS/Lucas Jackson  

Have you ever wondered how the stock market works? Well, ideally, you want to invest in an attractive stock with high potential, then sell the stock when you believe it is at its all-time high. The common stocks you know, like Google, Apple, Amazon, Starbucks, and McDonald’s also get their earnings from consumers as well, not just from their products and services, but from investors who buy their stake to become shareholders of the company. Think of it as a fund-raiser. Thus, shareholders can steadily (or rapidly) increase a company share’s price by shareholders continuing to buy shares, and vice versa if shareholders sell their shares, stock prices can plummet. 

Commonly, traders sell and buy all the time and typically a company has 10 million shares to get going and issue, so you would need to have a ginormous amount to really move the needle. You can also have an army of traders that can make a stock price go completely off the rails. It is not like it hasn’t been done before. Regardless people should not precariously invest in companies just because of their biased opinion tied to the company itself without any further knowledge or just because they are well-known. You must think about fundamentals of the company, especially to other consumers (and investors), not just you, but what does others think about the brand? You are investing in a company, thinking that the company’s share price and profits will go up. That’s what you need to think as an investor, future profit. You also need to think about their competitions as well, why are they better and what makes them different? 

But it is not just the company (or companies) you have to keep up with, you also need to keep tabs with the market conditions, interest rates, GDP (Gross Domestic Product), inflations, economy, employment rate, company’s news, quarterly statements, other financial reports, and several other factors. All these factors can affect your invested stock’s price and the stock market, so it is important you follow your stock company’s news and the market news as well. Despite that you can do your due diligence on a certain company and have the greatest analysis, stock’s performance can still be unpredictable and can be extremely volatile. It is difficult to predict a stock’s price to go up or down.