Exceptions in Market Reactions

One exception in the market reaction with the news is established by the placing of the ADR in foreign markets. This type of financing is well looked on by the local agents of in the world. In this way, the placing of stocks overseas brings about important benefits like getting to know the company and the country in foreign markets and obtain fresh resources to finance the new projects of the company. One sign that is worrisome is when the newspapers say, as an explanation of the good behavior of the stock market, is the purchases of “Foreign stock funds”. It will all depend on the qualities, virtues and defects of the foreign buyers. Amongst them there are also the clever and na?ve groups whose motivations are at a smaller term than those of the internal institutional investments. Most of the foreign speculators want to, even when we are talking about pension funds, carry them out in the short term. They jump into the market when they see an opportunity, but on the other side want to step out as soon as they see danger, or have already obtained their benefits. Everybody will want to buy and sell at the same time. At the moment in which they buy, a favorable moment comes about, because it stimulates the market rates, but it also provokes an unfavorable situation when the papers are sold because the typical stretching occurs to sell. When the movements are developed in the absence of news, this is considered a good symptom. The raises announced of the markets are much less spectacular than the ones that occur inadvertently. We should not rely in any case of the news that comes from the same stock exchange. In most cases such news does not determine the market rates but on the contrary, it is the rates which make the news. After the closing of the stock exchange, everyone tries to explain variations of change or modification of the tendency. Each one believes that which better suits their interests. The fanatic of the game will always find arguments to explain the reasons of the upward movements and will do the same to justify the falling of prices. Finally, the investor needs to be alert in order to find the exceptional opportunities since many examples can be told about how surprising acts can affect the price of the stocks since, by definition, they cannot be predicted, but sometimes opportunities of buying or selling of stocks come up, and great profits can be obtained, which go against the emotions of the public.

Beginner Money Investing About the Value of the News The News and its Effect on the Stock Market How the Market Reacts to the News Exceptions in Market Reactions Foreign Investments The Falling Dollar