Determine whether stock prices are affected more by long-term or short-term performance

Determine whether stock prices are affected more by long-term or short-term performance

PART 1: POST MUST BE A MIN OF 300 WORDS

Determine whether stock prices are affected more by long-term or short-term performance. Provide one (3) example of the effect that supports your claim.

PART 2: COMMENT ON THE BELOW AND RESPOND BY GIVING YOUR OPINION ON THE POST. RESPONSE MUST BE A MIN OF 150 WORDS!

A number of factors can affect stock prices performances. Things such as; data clustering and daily database operations may cause conflicts in the stocks. According to Amazon Redshift, “Cluster can use either compact storage or dense computer nodes. The dense storage nodes types are highly complimented for substantial data storage needs. The dense compute node is developed for performance-intensive workloads. Each of the entities assists with scaling cluster” (n.d. Factors Affecting Query Performance. Amazon Redshift.). “The primary things that will increase stock prices are the supply and demand. The amount is provided by publicly traded organizations through initial public offerings or subsequent stock offerings. The numbers involving the shares are finite, based upon the company’s bylaws. With this sort of investment, supply may result in equations that are fixed. The shares are purchased through investors. Stockbrokers and investments exchanges and the buyer stock is matched. The demand side is the continued state of flux. Several elements can affect the demand in a positive way or negative view” (n.d. What Is the Most Basic Factor That Affects Stock Price? / Finance-Zacks.).

PART 3: COMMENT ON THE BELOW AND RESPOND BY GIVING YOUR OPINION ON THE POST. RESPONSE MUST BE A MIN OF 150 WORDS!

The price of common stocks is not rational in the short term. That is the essence of what drives short term stock price movement, irrational behavior on the part of investors. Human factor makes the stock market volatile. If we consider all investors as rational, then it would be for every investor rationally shares value and investment style, and buying and raising the price on the basis of information about the company’s financial integrity and its ability to turn a profit.

Emotion is what rules investing in the short term (six months or less) and not rational behavior. Gossip and television pundit commentary drive the price of a particular stock higher or lower in a short time horizon. A rational investor would value each company’s common stock on its fundamental value and technical analysis. Then, we would make an investing decision based on merit of that company’s financial fundamentals such as revenue and profit growth, dividends, etc. If the company has good fundamental finances and principles, then its stock price will continue to do well over the long run (six months or more).

PART 4: COMMENT ON THE BELOW AND RESPOND BY GIVING YOUR OPINION ON THE POST. RESPONSE MUST BE A MIN OF 150 WORDS!

Stock prices are affected by both short term and long-term factors. Stock prices are affected by short-term factors such as the news, economic climate, risk changes, buyer or seller behavior, and index changes. The long-term factors that affect stock prices are the company’s earnings and its growth. Looking at both of these lists, short term factors affect the stock prices more, in comparison to long-term factors. The long term factors definitely have an impact on the stock price, however factors such as the news or buyer/seller behavior can instantly change the stock price. For example take for instance, Samsung they have had a long history of high earnings and a steady rate of growth. They are one of the very few companies that can compete with Apple. When their new Samsung note 7 came out, their stock prices rose. However, when news broke of the batteries exploding in the new phones, their stock prices plummeted. After years of continuous and competitive growth and earning there was no match for the instant stock price decrease due to the exploding battery news. This supports my claim that short term performance definitely impacts stock prices more than its long term performance.