How Do the Values of Stocks Change?

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The values of a stock go up when the market is performing well, and the company that a person has invested in is performing well. Find out what factors can change the value of stock rapidly, such as wars and propaganda, with help from a licensed financial planner in this free video on the stock market and investing.

Part of the Video Series: Stock Market
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Video Transcript

My name is Bill Rae. I'm with Alumni Financial Services. I've been in the business in the finance world for well over 20 years. The question is how do stocks values change? Hmm, well first of all let me say to you that we're not going to offer you any type of investment advice in this short period of time. You need to talk to a licensed person when you're talking about buying and selling stocks and it's something that you should do after careful analyzation of your own personal desire, what you're looking to get, where you're looking to go. The other thing you should understand is what is a stock? A stock in it's simplest term is a piece of a company. In other words, you're loaning me for instance money to my company and I'm giving you a little bit of my company and there are many ways to do that. So how do those stock values change? Well, if I'm running my company well and the market is performing well, in other words the economic condition is good for business and people are doing well, you should expect your stock to increase in value. In other words if I'm making money, you should make money. However, the value of stocks can change rapidly and there are many other factors that can contribute to that. Catastrophic storms for instance might put an entire area out of business. Rumors and propagandas, wars, so many different emotional things can enter into it that have no bearing on whether my business is actually making money or not. And then of course the worst one is I'm not making money. If I'm not making money, then I can't pay you, that's the worst situation to be in. So as in everything financial, we urge you to understand the agreements or contracts that you are signing. Know what it is you're getting into. Understand the language. And by all means, seek outside counsel. My name is Bill Rae, we're with Alumni Financial Services and as always, we're here to help you build wealth.

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