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What Makes Stock Prices Rise? That's a very good question, but before we get to it, we should warn you that understanding the answer to this is not going to allow you to make money trading stocks. You should look around this site for information on why such a wish is pure folly. But it is an interesting question.

Stock prices go up because there are more people that want to buy it than sell it. People wanting to buy the stock will start to out-bid each other, meaning the price will go up.

Why is it that sometimes more people want to buy a stock rather than
sell it? This has many reasons:

• The herd instinct: They notice others buying and the price rising so they want to do the same.
• They just heard some news, like company A wanting to buy company B. Another example is that they're betting that their business will grow. For example a war just broke out, and the company builds military equipment. They'll make more money. That means that the company's net worth is expected to increase, so that will normally be reflected in the stock price.
• People start realizing potential, not necessarily from one event, but many. It doesn't have to be that the business will grow now, it could evenbe five years down the road. If they think that it's a reasonable bet that conditions have just changed so that growth will occur, they'll value the company higher today, in the expectation that the company will indeed live up to their hope and the company will eventually be producing more profit. An example of this was the dot-com bubble, where there wasn't one event, but a buzz around the internet that created an incredible over-evaluation of high-tech businesses.

So what makes stock prices rise? There are certainly logical reasons. But what it is crucial for you to understand is that there are thousands of professionals in billion dollar corporations that ask this question for every stock on the planet. By the time you've gotten around to figuring out that you think that stock X is a good deal, they've already bought it and the price has already gone up. If you think it's a good deal, it might have been a second ago, but it isn't anymore. It's just a normal deal. The news has already been factored in before you've had a chance to blink.

Don't waste your time and gamble your money trying to invest this way. What you need to do is reduce your risk that a catastrophe will happen to you. This site hopes to educate you about this, and even provides completely free 3D stock comparison and visualization software to help you understand the whole investing game better. So, stop worrying about what makes stock prices rise and start thinking about reducing your risk when investing.