| Â investors reflect future earnings | | | | Western Union announced that it made more |
| expectations of a stock in its price immediately.As | | | | profits than what it expected earlier then its |
| soon as any piece of news is released investors | | | | stock price will go up |
| respond with either buying or selling the stock to | | | | - When interest rates go down most stocks go |
| reflect this new news in the pirce. In this article i | | | | up, see my article why do stocks do down when |
| will explain what makes a stock price go up and | | | | interest rate rise |
| how you can take advantage of such information | | | | - When the company announces that it will buy |
| to make good profits. | | | | back its shares its price goes up |
| What makes stock prices go up? | | | | - When analysts upgrade the stock and give a |
| At any point of time the price of a stock reflects | | | | better recommendation on it |
| all the future earning expectations this stock can | | | | - When analysts upgrade the whole sector within |
| bring you. For example, if Western union use to | | | | which the company operates |
| distribute 1 dollar/year as dividends, then this fact | | | | - When another company announces an offer for |
| is going to be priced already in Western Union's | | | | buying your company, usually such offers add |
| stock price. Now if the management announced | | | | good premiums to the current price |
| that they will increase the dividends to 2 dollars | | | | - When people are afraid, when everyone |
| next year then Western Union's price will move | | | | becomes afraid and when people start to dump |
| up to reflect this new change in the future | | | | shares at unreasonable prices then this may be a |
| earnings expectations. Even though investors | | | | signal that shares will rise on the medium term |
| haven't received any of these dividends yet the | | | | - When the whole market goes up, even though |
| stock price will still go up because the price always | | | | this is not a rule still a stock is more likely to rise |
| reflects the future earnings of a stock. | | | | if all other stocks are rising |
| There are lots of factors that can make a stock | | | | - When a company in the same sector reports |
| price go up, here are some of them: | | | | unexpected profits |
| - Future earnings expectations increased | | | | Final words |
| - A commodity that directly affects the | | | | Making the right choice from the beginning is what |
| company's stock went down in price, for example | | | | will make your stock deliver good news for you. |
| a company in the steel industry (energy intensive | | | | Buying stocks that have strong competitive |
| industry) its price might go up when crude prices | | | | advantages ,creditable management and good |
| go lower because of the reduced energy costs | | | | value compared to their price are the key factors |
| - When the company beats the expectations its | | | | in making the right selection. |
| shares rise, for example if at the end of the year | | | | |