Forex Trading Daily Forecast EUR/USD

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FACTORS THAT AFFECT THE SHARES PRICES

Factors-affecting-share-prices

Many factors influence share prices. But several key factors have an important role in determining the value of the shares.

Earnings and other fundamental data

Most often the presentation of the companies moves the prices of their shares. When you buy shares then you buy a part of the company and you are involved with some of the successes and failures. A company that performs better than others in a field of action attracts more interest in its shares. The interest means a search which leads to higher prices. The opposite is true for a company that presents itself in a disappointing way.

To determine the presentation of a company the traders and analysts explore the company's balance sheet and profit and loss account. The profit of the company – the sum that remains after the company’s cover of the expenses is usually the most important. Traders monitor and other data for companies that influence their decisions as fundamental data, earnings and ratio of price to book value, etc..

Dividends

Companies have a choice between two things with the profits: they can retain and reinvest them in the development of the company or to pay dividends to the owners of the shares. Dividends are payments on the shares so if a company with 1,000,000 shares has paid $ 5,000,000 dividends each share receives $ 5.

Traders appreciate highly the dividends because shares owned for some time have a regular cash return on the investment made in them. Dividends are well valued by the market. To increase the price of their shares some companies may increase the price of its shares, increasing its dividends (but investors will want to see that the company can afford this generosity). However, nowadays a few companies pay dividends and orient to reinvestment.

Forex Trading Daily Forecast EUR/USD

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