Stock Market Crash
The stock market is an essential aspect in the economic development of any region. It entails the trade of shares which are mainly securities that are listed in a given stock exchange as well as those that are traded privately. A stock market crash occurs when the market experiences a sudden decrease of prices in a significantly large segment of the stock market. The forces of supply and demand of the shares within a given stock market determine the stability of not only the market but also the economy of the region in question.
Fraudulent behavior of some stakeholders can cause a stock market crash. This can take the form of insider selling or illegal manipulation of the price of shares. According to Harold, insider selling entails the sale of shares at a very scary rate besides creating a debt. This calls for a sudden reduction of the price of shares.
Overpricing of shares renders the stock market susceptible to a crash. The ultimate effect of this act is an increase in the sale of shares at an alarming rate. This calls for a sudden reduction of the price of shares within the market.
The inability of the specialists within the stock market to deal with a high rate of flow of sell orders can cause a stock market crash. For instance, during the 1987 crash, the New York Stock Exchange specialists were unable to find sufficient buyers to purchase the shares available for sale at a given price. This led to the termination of trading in many listed stocks which propagated the crash.
A stock market crash has a negative impact on the economy. It can lead to unemployment of a large number of people. For instance, during the 1987 crash in the U.S., more than 15,000 people lost their jobs. In extreme cases, it could lead to the collapse of major institutions that form the core of a given sector in the economy.
In conclusion, a stock market crash affects not only the stability of the stock exchange market in a given region but also its economy. It can be caused by insider selling, overpricing of shares and lack of effectiveness of the trading mechanisms of financial markets among other reasons. It can cause both monetary loss and unemployment.
Essay on Stock Trak Investment Report
1335 WordsMar 7th, 20126 Pages
Stock Trak Investment Report
[Portfolio Investment Analysis]
Portfolio management is an important factor that determines the performance of the portfolio. To perform well in the portfolio, it is not only essential to develop personal investment strategies, but analyzing current financial trend is also vital. Stock Trak is an online portfolio simulation that allows students to try out different investment strategies, and also get a hand on experience in what the real market trading conditions are. By managing the portfolio, I have acquired some new knowledge of investment strategies and also become more familiar with the current market by following closely to the financial headlines. My portfolio composed of only a few specific stocks…show more content…
The weekly performance of IBM stock presented a contestant growth. One highlight of the falling of stock price in the 6th week in the investment period was when IBM presented the 3rd quarter financial report. The investors weren’t satisfied with the profit report which they expected to be better especially when other IT companies were doing well in the 3rd quarter. One mistake I made was that I didn’t follow closely to the financial report of the company; therefore, I missed the peak of the stock price. From this experience, I learned that financial reports and current news are important indicators of the stock price. By following closely to the current event and analyzing the financial report, investors can maximize the profit and also become more familiar to the market. Google Inc. (GOOG) was purchased on September 8th, 2011 and sold on December 6th , 2011 with quantity of 5 shares. The purchase price was $534.96 and the closing price was $625.25, which gave me a total return of $431.45 after deducting commissions.
The weekly performance of the stock has a trend of constant growth with a significant growth in price compared to the IBM stock which happened in week four to six (09/30/11-10/06/16). A major factor for the large jump in the stock price is due to the shocking current news of Google acquiring Motorola Mobility for $12.5 billion. Right after the announcement of