Topic > Interest Rates and Interest Rate Risks - 1382

Interest Rate Risks The interest rate set by banks has a great influence on businesses and will therefore also influence your actions. For example, it could affect savings rates and mortgage rates, which could affect companies that rely on insurance companies or companies that have mortgages on their properties. Even bonds, which are fairly safe investments, are affected because interest rates can make them harder to sell on the open market, meaning you have to keep your money invested in them until their term expires. Interest rates can have a big impact on the companies you buy shares in, which means they could have an effect on your future wealth and the growth of your portfolio (your portfolio is just another name for your catalog of stocks that hold with different companies ).Not to belabor the point, but interest rates can affect how consumers spend money, meaning the companies you've invested in may have fewer customers for a while, which will have an effect negative on your stock prices and could even drive the company into bankruptcy. .Market Risk This is a case of supply and demand at its core. If customers suddenly decide they don't need the products produced by the company you've invested in, they will stop buying and your shares will decrease in value and/or the company will go bankrupt and you will lose your investment. Supply and demand also affect your stock price. If many people want the same shares as you, their price will rise. A company that suddenly attracts a lot of attention will often see its stock price rise. On the other hand, if you look at stock prices, you will often see that the stock price drops when there are large stock sales. This is due to supply and demand; when there is more... half of paper... you need to invest in a financially sound and growing company. It must offer products or services that consumers want and/or appreciate, need and require. It should also be in a strong, growing industry, and ideally within a strong, growing economy. There are tutorials and glossaries online that will help you understand different words and elements specific to investing and investment strategies, but in its simplest form, you are buying and selling stocks as if you were buying and selling postage stamps. You should check the news for information that may be relevant to your company, which means doing more than just searching for information about the company whose stock you want to buy. Look for industry news, especially news related to your company's competition. Check previous stock prices and monitor stock selection to ensure you are selling at the right time.