How Stock Market Prices Are Determined

How Stock Market Prices Are Determined At a very basic level, economists know that stock prices are determined by the supply of and demand for them, and stock prices adjust to keep supply and demand in balance (or equilibrium).  At a deeper level, however, stock prices are set by a combination of factors that no analyst can consistently understand or predict.  A number of economic models assert that stock prices  reflect the long-term earning potential of companies (and, more specifically, the projected growth path of stock dividends). Investors are attracted to stocks of companies they expect will earn substantial profits in the future; because many people wish to buy stocks of such companies, prices of these stocks tend to rise. On the other hand, investors are reluctant to purchase stocks of companies that face bleak earnings prospects; because fewer people wish to buy and more wish to sell these stocks, prices fall. When deciding whether to purchase or sell stocks, investors consider the general business climate and outlook, the financial condition and prospects of the individual companies in which they are considering investing, and whether stock prices relative to earnings already are above or below traditional norms. Interest rate trends also influence stock prices significantly. Rising interest rates tend to depress stock prices - partly because they can foreshadow a general slowdown in economic activity and corporate profits, and partly because they lure investors out of the stock market and into new issues of interest-bearing investments (i.e. bonds of both the corporate and Treasury varieties). Falling rates, conversely, often lead to higher stock prices, both because they suggest easier borrowing and faster growth and because they make new interest-paying investments less attractive to investors. Other Factors That Determine Prices A number of other factors complicate matters, however. For one thing, investors generally buy stocks according to their expectations about the unpredictable future, not according to current earnings. Expectations can be influenced by a variety of factors, many of them not necessarily rational or justified. As a result, the short-term connection between prices and earnings can be tenuous. Momentum also can distort stock prices. Rising prices typically woo more buyers into the market, and the increased demand, in turn, drives prices higher still. Speculators often add to this upward pressure by purchasing shares in the expectation they will be able to sell them later to other buyers at even higher prices. Analysts describe a continuous rise in stock prices as a bull market. When speculative fever can no longer be sustained, prices start to fall. If enough investors become worried about falling prices, they may rush to sell their shares, adding to downward momentum. This is called a bear market. This article is adapted from the book Outline of the U.S. Economy by Conte and Carr and has been adapted with permission from the U.S. Department of State.

Ideas on Completing a Proposal Essay

Ideas on Completing a Proposal Essay Ideas on Completing a Proposal Essay A proposal essay is quite an interesting assignment, which often causes lots of troubles and misunderstandings. However, it is quite simple and aims to propose a certain idea, which needs to be backed with arguments. The main goal is to persuade the reader that this idea is good or bad, depending on the task you have. To get a better understanding of the assignment, you can consider yourself a seller: you need to convince a person to buy an item even it is not so necessary. If you don’t think that you have a persuasive talent or don’t possess proper writing skills, just go on reading and we assure you that you will be able to complete a proposal essay without any difficulties. Content of a proposal essay Any proposal essay has the same structure, so you only need to remember it and stick to the outline, when completing another essay: This section gives basic information on the subject and provides important issues to catch the reader’s interest. It should make the audience want to go on reading, so introduction is one of the most important parts of your essay. The last sentence needs to contain a thesis statement; This section should be very brief and clear. All you need to do is to give the reader information on the idea you want to describe. Avoid providing any details on the research itself; Action plans. This section can be considered the key one, as it aims to persuade the reader that your ideas are good. Create a separate paragraph for every evidence or action plan and write how you are going to achieve your proposal; As always, this section aims to provide readers with the summary of your proposal ideas. This section should paraphrase all you have mentioned before and encourage the reader for more research if possible. Useful tips Always pay attention to the research. Collecting valid information is crucial in persuading the reader; Use only credible sources, when backing your ideas. If you use internet forums or doubtful websites, be ready that your tutor will ask you to redo the essay; Always do a proper citing and never plagiarize someone else’s works. It is quite easy to check whether you have completed the essay on your own; Work on your writing skills. Your lexis should be full and professional, without slang or shortenings; Always try to be specific. Develop a few ideas thoroughly instead of covering a wide range of topics and subjects. When you already know how a proposal essay looks like and what tips you need to follow to create an outstanding paper, you need to think on a winning topic. If your tutor doesn’t give you any recommendations, you may feel a bit stressed, as choosing a proper topic can make up to 50% of your success. Don’t panic! We can provide you with a great solution. Proposal essay topics Can euthanasia be considered an assisted suicide? Should it be allowed or prohibited? What makes up traditional family values? Main rules you need to teach your children before it is too late; How same-sex marriages can affect birth rates? Does free speech have any limits and restrictions? What should the government do to reduce drug usage among teenagers? Reasons of violence among high school students; Can parents’ divorce influence future love life of a child? Bullying: effective measures to eliminate it; Will online games eventually replace physical activity and social interactions? How can parents help their children in choosing a career? How can parents help their children resist pressure? What one needs to know about a healthy lifestyle; Reducing dependence on fast-food: main tools; Should sex education be compulsory at schools? How the world will benefit if all countries unite? International terrorism: who is the grey cardinal? Can internet usage be safe? How to minimize the number of smoking adults? How to protect small enterprises? Can childhood obesity influence the rate of heart attacks among adults? What are the measures to prevent racism and fascistic approach? How can we become a tolerate society? Sexual abuse online: modern trend or an alarming situation? Is the modern grading system effective? How US veterans should be treated? Is it right to give all prisoners a voting right or should it be a privilege for a good behavior? Can veganism protect rights of animals? What are the ways to reduce animal abuse? Morality in media: myth or reality? What a regular citizen can do to reduce the development of global warming? How can we save ecology on daily basis? Should a foreign language be compulsory at schools? Conclusions The main goal of a proposal essay is to propose your own ideas on a certain matter, issue or event, along with convincing the reader to accept your point of view. The best way to perform such a task is to imagine yourself a salesperson, who needs to sell something. The ideas, which were mentioned above, can be a great way to choose a proper topic for your proposal essay.