Should you be worried when the market fluctuates?

 

It is only normal if you are worried about when the market will fluctuate, you are investing so much, we know how it feels like when the market is not going the way you want. 

 

The continual ups and downs in stock prices can be attributed to supply and demand shifts. If demand for a stock rises, so does its price on the market. The price of a stock usually goes down when there are more sellers than buyers. In terms of supply and demand, the latest news can have a huge impact on the dynamic.

 

When investors hear bad news, they typically sell their investments. Many, if not most, stock prices fall in response to selling pressure after unfavourable news such as a disappointing earnings report, a governance breakdown at a company, or general economic and political unpredictability.

 

People frequently rush to acquire stocks as soon as they hear positive news. News that businesses are performing well, releasing new goods, making acquisitions, or witnessing positive economic indicators causes stock values to increase.

 

However, negative news for some stocks might be positive for others. For instance, the announcement that a hurricane has made landfall can drive utility stock prices to drop in anticipation of exorbitant emergency response and repair costs. Depending on how bad the storm is, insurance stock prices will decline as a result of the news. In the meantime, home improvement retailers' stock prices will increase in expectation of increased sales in the upcoming months.

 

Events like a significant auto safety recall, an uprising in oil prices due to unrest in the Middle East, or an extended drought that destroys crops are examples of things that are simply impossible to predict. Although traders may believe they are factoring in risks, there is always a chance that anything could go wrong. Consequently, news that is unexpected rather than just any old news moves prices in one direction or the other.

 

So if you are wondering whether you should worry or not, you don't have to. The market fluctuates day to day, which is why it is called volatility. Just have to wait patiently while doing research.