Financial Markets Book Financial Markets For The Rest Of Us
An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds
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by Robert Hashemian

Page 215

Being Added To An Index - Popular indices such as the DJIA or S&P 500 are always in the limelight. They are dynamic indices, as companies are always being added or dropped from them, and there is a certain kind of prestige that comes with being listed in one of them. After all, companies that achieve this have proven themselves worthy enough to be considered for the coveted listing. A listed company's stock may receive more attention than others because of its status, and also because many times money or fund managers (especially those dealing with index funds) will buy the stock as a matter of course. This translates to higher demand and thus a price boost for the stock. Stocks moving from the OTC to the NASDAQ or NYSE listings may see the same kind of rise in price.
Company Buying Own Shares - Sometimes companies may decide to use their extra cash to buy back their own shares, rather than investing it back into the company or paying dividends. This is often the case when a company wants to boost a stagnating stock price, going back to the basic concept of supply and demand. By soaking up some of their own shares, companies reduce outstanding shares, thereby giving a lift to their stock price. Moreover, investors may regard such a move as a vote of confidence by the company given to its own stock. If the stock is good enough for the company to buy, it is probably good enough for investors to invest in as well.
Sector Health - Sometimes stocks in a given sector move up in price as a whole. A certain sector may suddenly be deemed by investors as a good bet depending on market conditions. Many times all stocks playing in the favored sector move up together, but sometimes a few stocks may be overlooked. Unless there are fundamental reasons why these companies are lagging, chances are that they will be discovered sooner or later and catch up with the rest of the sector.
Good Conditions For A Dependent Company (Or Sector) - A good example of this is the PC business. PC manufacturers such as Dell and Gateway depend heavily on other industries to produce their products .
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  • Book Chapters
    Table of Contents Copyright and Disclaimer Foreword Money
    Bonds Futures Stocks Options
    Mutual Funds Retirement Final Words Appendix A

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