Investment Stocks Tips : How to Understand the Stock Market
Hi everyone, this is Chris Markowski, president of Markowski Investments and host of the Watchdog on Wall Street radio show and I’ve been asked, I’ve got this task, this quest, this is like, you know I feel like Frodo from Lord of the Rings trying to explain how does one understand the stock market? Well, with all of the volatility and all of the stuff that we’ve seen especially most recently, very, very difficult thing to do. The best way I can go about explaining is this. Something goes up, stock will go up, gold will go up, bond will go up, whatever it may be, when there’s more buying than selling.
Supply and demand. Pretty simple, right? The inverse is true as well. The inverse means that there’s more selling than buying, the price is going to go down.
You know I get a kick out of, you pick up the Wall Street Journal on any given day and they say stocks are up for blah blah blah blah blah reason, stocks are down for blah bla blah blah blah reason. Well there’s not necessarily true. They’re actually giving their opinion on why stocks are up or why stocks are down.
The only reason why they’re up or down is because of supply and demand and what I told you before.
For example, you know, recently we had oil prices go up to above a hundred and fifty dollars a barrel.
And any single time, you know, any type of storm, a thunder storm would happen to pop up anywhere in Florida, the price of oil will be up five bucks, somebody would be get kidnapped in Nigeria, oil would be up. Well, in a very short period of time we had two major hurricanes pass through the Gulf of Mexico, actually shut down the platforms and oil went down.
See, so sometimes it doesn‘t need to make any sense at all, the only thing you need to understand, it goes up, more buying than selling, it goes down, more selling than buying. This is Chris Markowski, your watchdog on Wall Street.