Questions tagged [stock-markets]

for questions that relate to stock markets. A stock market is a network of financial transactions, not a physical facility or discrete entity, for the trading of company stock.

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231
votes
21answers
76k views

Why isn't everybody rich?

This question came up after reading this question (stock market long term risks), in which it is re-iterated (as it has been many times on this site), that investing in the stock market, especially an ...
99
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7answers
51k views

Why is the stock market closed on the weekend?

It's all digital and done with computers these days, so why bother? Doesn't that just make the system less liquid, which is the opposite to one aim of having the stock market? Plus can't you just ...
67
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3answers
15k views

How did this day trader lose so much?

I recently read this article about a day trader that lost $100,000: A trader started a GoFundMe page to pay back $100,000 to E-Trade after a disastrous short Please explain this, because I can not ...
64
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6answers
8k views

At what point do index funds become unreliable?

Passively investing in exchange-traded funds that track some broad index is often recommended for private investors that don't have the time or expertise for active investment. In particular, index ...
60
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5answers
16k views

Can a company block a specific person from buying its stock?

Say there is a very rich, very unpopular individual. This individual wishes to buy millions of dollars in stock in a company he or she thinks will be successful. The company, however, realizes that by ...
59
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10answers
11k views

If a broad long-term investment in the stock market is such a good deal, why don't banks do the “obvious” things?

There is a fundamental discrepancy or paradox that has been keeping myself, and many others, away from the stock market. Before I explain it, let me mention some selected popular questions on this ...
58
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16answers
18k views

Why can't we all agree to create a self-fulfilling prophecy with regards to the stock market?

To start off, I'm very green in my understanding about finance or the behavior of the stock market, but it does seem to me to be driven largely by fears & emotions of investors. If investors feel ...
58
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4answers
108k views

How does a public company issue new shares without diluting the value held by existing shareholders?

When a public company issues new shares, the total number of shares traded in a secondary market goes up. Assuming there is no change in the fundamentals of the company and the profitability, I would ...
49
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9answers
22k views

Investment strategy for Google: What did I do wrong?

Background: I started investing in stocks in October 2017. I have a $22K portfolio which is 60% software, 20% semiconductor, 10% healthcare, 10% others (retail, banking, etc.). It's tech-heavy ...
42
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9answers
10k views

Why do stock prices of retailers not surge during the holidays?

My six-year-old (!) son asked me this question and I didn't have an answer, so I told him I'd get back to him. He asked why people don't buy a large number of shares of a company before the holiday ...
36
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9answers
8k views

Why isn't the market dropping like a stone with all the bad news?

So I am reading and listening to the news, watching the numbers re Covid-19, listening to and reading apocalyptic accounts of the coming recession, hearing of record breaking unemployment reports and ...
36
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4answers
9k views

What prevents stock prices from being artificially increased?

Let's say company FOO is trying to increase their $20 stock price. They agree to sell a share for $100. Of course, nobody buys. Now their buddy buys the share for $100. And maybe sells it back for ...
36
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6answers
10k views

Why would the stock market plunge on oil price crashes?

There are lots of news headlines on 3/9/2020 that read like this: "Saudi Oil Price Cut is a market shock" "Oil price war threatens widespread collateral damage" "low oil prices could ...
30
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6answers
6k views

Why should I care about short term stock market fluctuations?

I understand that the stock market is important. Even when people don't directly invest in it, they might still have pension savings which will be invested in the stock market. Returns over a 20–50 ...
28
votes
8answers
6k views

Can a casual investor effectively predict the direction of the stock market?

Is the stock market an efficient market, with assets whose direction of change in prices cannot be predicted by casual investors? The reason I'm asking this is because certain family members are ...
27
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5answers
11k views

Why do baby boomers have to sell 5% of their retirement accounts by the end of the year?

This article on Marketwatch quotes Raoul Pal of Goldman Sachs claiming that baby boomers have to sell 5% of their retirement accounts by the end of the year. Here is the specific passage: Pal says ...
24
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11answers
9k views

What should I do with the stock I own if I anticipate there will be a recession?

I want to preface this with saying I am not asking if there will be a recession because I recognize that this is impossible to answer. I am asking if I feel there will be a recession, what should I ...
24
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2answers
10k views

Did Johnson and Johnson really pay a 25% quarterly dividend in 1978?

I looked through some of the old Dow Jones stocks for a project I'm working on and found some inconsistency with JNJ stock. For a share price of $1.66 they appeared to pay $0.42 in quarterly dividends ...
23
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1answer
3k views

Will the popularity of index funds cause a pricing bubble in the stocks that make up an index?

I can't help but notice the popularity of index mutual funds over actively managed funds. I think all the arguments are sound, but I have one worry: Index funds are run by buying the stocks listed ...
22
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4answers
7k views

Did an additional $32 billion necessarily get invested into Amazon.com stock on October 26th, 2017?

The share price went up about 6.9%, and the market cap is $466 billion. Does that mean that that much new money had to have been invested after hours? Would it otherwise be possible for the stock ...
22
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9answers
5k views

Why do banks give small APR loans

I apologize if this has been asked before.... If you can reasonably expect to profit 6% or more from index funds and there are other ways to make a reasonably safe 6% on the stock market.... Why do ...
19
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7answers
8k views

Paradox - When to buy & when to sell a share?

Warren Buffet says buy when everyone is selling and sell when everyone is buying. Taking into consideration the support and resistance levels, everyone is selling near the resistance level and ...
19
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4answers
2k views

How to invest in stocks without using an intermediary like a broker? Can shares be bought direct?

I am looking to buy stocks but I would like to do so without a broker. From what I can tell, the exchanges are good ole boys clubs that require you know (or pay) someone in order to participate. Am I ...
18
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5answers
8k views

Why is AT&T's stock price declining, during the days that they announced the acquisition of Time Warner inc.?

Why does the stock price decline when a seemingly promising acquisition is announced & agreed on?
18
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1answer
3k views

What is the relationship between taxes and annual liquidation of the markets? [closed]

I read this article on MarketWatch where they outline Elizabeth Warren's plan to tax the wealthy: 2% tax on every dollar above $50 million in assets 6% tax on households crossing the $1 billion ...
15
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8answers
8k views

How can I make any sort of profit in day-trading if the price doesn't rise much after I buy stock?

How can I make 'big profit' in day trading if every stock I've seen only raises by around £10? I've actually found some companies that make me a £30 profit, is this what I need to go for? I'm just ...
15
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2answers
5k views

Do “normal” shares in large companies pay equity, as well as profit?

If I buy shares in a big company like Intel or Microsoft I (can) receive a dividend. So these shares (can) pay "profit". However, if the company is bought, do i also receive a split of the "equity"/...
15
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7answers
3k views

What happened when the dot com bubble burst?

The Wikipedia article on the dot-com bubble defines it as: a speculative bubble covering roughly 1995–2000 (with a climax on March 10, 2000 with the NASDAQ peaking at 5132.52 in intraday trading ...
15
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5answers
2k views

Does it make sense to buy an index ETF (e.g. S&P 500) when the index is at an all-time high?

I have some money I intend to invest over the next 3-4 years. An important chunk of my portfolio would be invested in a stock market index ETF such as one representing the S&P 500. Unfortunately, ...
15
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4answers
15k views

When would one actually want to use a market order instead of a limit order?

I'm new to investing. I'm looking into using an online discount broker to experiment with private trading. I'm in a position I don't mind losing money, but I don't want to lose more than I put in. ...
14
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7answers
5k views

What's is the easiest way to purchase a stock and hold it [closed]

I'd like to invest some cash (just few thousands) that is currently sitting on my bank account. There are few companies I believe will significantly increase their value in the next years (let's say ...
14
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4answers
4k views

How is there a market for shares that get destroyed on sale?

After the spin-off of Hamilton Beach Brands from NACCO Industries I now own an equal number of A and B shares of Hamilton. Now here's the thing; the B shares have an interesting provision wherein they ...
13
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5answers
7k views

Will the stock market continue to grow forever?

I am relatively new to investing. I understand that the stock market, in some sense, reflects what happens in the real economy. For example, if the U.S. economy grows, the stock market in the long ...
12
votes
3answers
16k views

If you own 1% of a company's stock, are you entitled to 1% of its assets?

Say you own 1% of company ABC's shares. If all of a sudden there is no more demand in the stock market for company ABC's stocks, and its share price dropped down to $0, can you claim 1% of company ABC'...
12
votes
5answers
318 views

What is the rationale behind stock markets retreating due to S&P having a negative outlook on the USA?

From a Bloomberg article published on 18/4/2011 Standard & Poor’s put a “negative” outlook on the AAA credit rating of the U.S., citing a “material risk” the nation’s leaders will fail to deal ...
12
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4answers
12k views

Where should I invest to hedge against the stock market going down?

Let's say that the stock market falls in value for whatever reason. Maybe a bank or two goes out of business, for example, and stocks fall 20-30%. What would you invest in if you were sure this was ...
12
votes
4answers
15k views

Can a trade happen “in between” the bid and ask price?

According to Investopedia: By looking for trades that take place in between the bid and ask, you can tell when a strong trend is about to come to an end. This is because these trades are often ...
12
votes
3answers
3k views

How do companies get money from being listed publicly? [duplicate]

How do companies get their money from being on the stock market? I understand the reason a company will list is to raise capital. Who gives them this money? The stock market is between buyers and ...
12
votes
6answers
6k views

Should I continue to invest in an S&P 500 index fund?

I am saving to buy a house in 5-8 years. This year I invested $40,000 in a prominent ETF which tracks with the S&P 500. So far, I've lost $3,250, that is the stocks are now worth $36,750. I save $...
12
votes
4answers
44k views

What does “more buyers than sellers” in technical analysis of stocks actually mean?

I often hear/read technical analysts looking at volume and price action on a chart and claiming that there are "more buyers than sellers" or vice versa. Since every trade requires a buyer and a ...
12
votes
1answer
540 views

Why do stock markets end all trading for the day after a 20% fall?

The New York Stock Exchange just halted trading. This CNN entry explains the benchmarks they use to do that The New York Stock Exchange has a series of "circuit breakers" in place to calm investors'...
11
votes
4answers
21k views

Can we estimate the impact of a large buy order on the share price?

What I am trying to understand is: If we know the number of shares a company trades and the current price of the share, can we estimate what volume of trade that is required to move the share price in ...
11
votes
7answers
9k views

What is the smartest thing to do in case of a stock market crash

What would be the best thing to do, if the stock market crashes? Should one invest in real estate, fonds, bonds or stocks? Or should one invest nothing at all? Edit: Since it seemingly was not ...
11
votes
5answers
2k views

When is the best time to put a large amount of assets in the stock market?

I'm interested in timing with regards to long-term index investing. Based on the advice of The Investor's Manifesto and others (John Bogle, William Bernstein) they stress how big a difference ...
11
votes
3answers
5k views

What percent of a company are you buying when you purchase stock?

Lets say I buy a share of Apple stock. When you talk about stock, you say you are buying a small amount of the company. How small would 1 share of apple stock be at the moment you are answering the ...
10
votes
7answers
5k views

What does it mean for a company to have its market cap larger than the market size?

Let's say for example, the refrigerator market is sized at 10 million dollars (hypothetical example), if the market cap of a company is, say, 20 million, is it worth investing in the stock? Can it ...
10
votes
10answers
7k views

Does the stock market create any sort of value?

Sorry if the below seems like a conspiracy theory. It probably is, but I probably don't understand something. (This has bugged me to no end as long as I can remember.) Okay, so here is what I ...
10
votes
5answers
2k views

Stock market vs. baseball card trading analogy

I will use a baseball card trading analogy to present my question: The baseball card trading market, like any other market, follows the laws of supply and demand. The demand for baseball cards can be ...
10
votes
3answers
3k views

Is it possible to take advantage of the current low market by buying financial instruments connected with oil/natural gas?

I was really hesitant to ask this question, but based on the reception of this other question Good investment options to take advantage of current low market I hope this one won't be off-topic. Also ...
10
votes
1answer
4k views

Why is this stock price inflated by 70x its real price?

The price for CSP1 (London Stock Exchange) has a short term price history that indicates the prices are roughly 7000% of what they are in reality. For example, on Jan 29th 2016 the price was reported ...

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