Why does the stock market move up and down

Why does the stock market move up and down?

Many of us have a curiosity about why the stock price moves up and down. Many times you see that stock price moves 20 % up or down in a single day. So why does this happen?

• If you are investing in the stock market you are not looking for 20 % returns you want to double or triple your money in the stock market but how can you make these big returns?

In this blog, we will discuss how you generate huge returns in the stock market.

• In the stock market, there are two types of investors retail investors and institutional investors. There is one similarity between retail investors and institutional investors which is emotion.  We all are humans, therefore, our decision makes the movement in the stock price.

• Example: Let say you want to invest in hdfc bank share because you this hdfc bank will grow in the future but one week after your purchase there is some bad news about the company however this news does not affect the company growth in future but still investors think it will affect the company growth in future and decide to sell the stock when investors start to sell the stock there is disturbance in demand and supply of stock.

• The stock price can fall 20 percent in a single day and more in the next day without any particular cause. Therefore after a news flow in stock analyze whether the news affects the company growth in the future then decide to sell the stocks.

• Also, news can give you a good return if it is good news for the company Example: Let say you want to invest in  reliance industries share because you this  reliance industries bank will grow in the future but one week after your purchase there is some good news about the company

• The stock price can jump 20 percent in a single day and more the next day without any particular cause.

• Conclusion: If any company stock price moves only based on news it will now generate a good return for you, therefore, stay away from these kinds of stock. However, if company stock price moves along with company annual growth these kinds of stock will generate huge profits for you example Asian paints share.

• Therefore if you want to gain long term gains in the stock market we need to control our emotions.