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Stock Prices

There are two reasons why a stock's price goes up or down.

The first is the future financial outlook of the company issuing the stock. If it seems likely that a company's earnings will grow at a healthy rate, investors will probably be willing to pay higher prices to own its stock. On the other hand, if it seems that the company is struggling to grow its sales and earnings, investors will be less interested in owning the stock and its price may drop or, at best, remain relatively stable.

The second reason a stock's price goes up or down is related to the general state of the stock market. If the market is booming, stock prices typically go up. But if the market is falling, many stocks often drop in price, regardless of the future financial prospects of individual companies.

While it is very difficult to anticipate the general movement of the stock market accurately, investors can study the market by reading about it in the Selection and Opinion section of The Value Line Investment Survey. You can study individual stocks using the information provided on the Value Line page. We know of no source that gives more concise and detailed information.

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