Thursday, February 9, 2012

What affects the stock market and how can I create a guide for stocks and indexes?

-How do P/E ratios and beta affect stocks?
-Does the market cap affect stocks?
-How does news around the world affect the market?
-Why are high dividends good for stocks?


-I know that P/E ratios are price per share over the earning and that high P/E ratio is a stock on a come, and that stocks with low but not to low P/E ratios are good. Beta is volatility, how fast the stock moves compared to the market. The market cap. is the price multiplied by the number of shares, I'm not sure how it affects the stock. Good news, like unemployment rate going down will create a bull market, where most the stocks go up, but bad news like, an large earthquake somewhere will create a bear market, which is most stocks going down. Dividends are what you get paid from the stock, usually as it goes up the price goes down and if the stock goes up usually the dividend goes down. This doesn't always happen. I like to watch high beta futures and indexes and low beta stocks.