How do P/E ratios and dividends affect the stock market?

P/E ratios are the price paid per a share to the annual earnings. They affect the stocks price because they make the company worth more money if they make more money. Good P/E ratios are in the range of 10-20. Sometimes you see stocks with P/E ratios in the 1000s, because those stock aren't making money now, but people expect them to make money in the future. A small app development company may have a stock with a high P/E ratio. Dividends are what the company pays you for owning their stock. A good dividend is 3-6%. If a dividend is 4% and I own the stock for 20 years and the price stays the same, I'll have made my money back. If a company gets a good earnings report they often will lower the percent of the dividend. Investors who look at P/E ratios and dividends aren't day traders, stock traders who buy a ton of stock and trade it for a profit every day. These stocks aren't very volatile, with low betas of about 0.75-2. AT and T is a low volatile stock with a 6% dividend. Some terms I learned this week were,
Day Trader: A stock trader who hold a stock for a very short time.
Black Box Model: A computer program, which contains formulas and calculations, and automatically trades.
Interest: The charge for borrowing money.
Bond: An loan to the government with a defined period of time and fixed interest rate.
Commission: A service charge for a broker or investment adviser for handling purchases.
Collateral: Properties or assets to secure a loan.
Mortgage: A debt instrument that is secure by collateral that the borrower must pay you back in a set of payments.
I would like to research more about different types of traders, such as future traders, black box traders, and day traders.
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