Posted On: 23 Dec, 2017 12:07:42
Whether it is good or bad news, news moves stocks. When events happen someone or something in the world is affected, add the stock market to the list of things that react to news event. This year there were a couple of events that took place that provide an good of example of this.
After a hurricane hits there is always mass destruction, the most recent example of this was when Hurrican Harvey hit the city of Houston at the start of hurricane season this year. Massive devastation calls for massive rebuilding efforts which provides opportunity for construction jobs. Public companies like Goldfield (GV) and Willbros Group Inc (WG) specialize in construction and infrastructure work. Companies like these become beneficiaries of the massive rebuilding efforts in this regions of the country. If we were to look at the stock price of each of these companies around this time, we would see an increase in stock price. The increase in stock price is due to investors anticipating the large amounts of work orders these companies will receive.
The stock prices of home improvement stores also increase around this time as well from the increase in sales. Investors are looking to profit from all the people rushing Into stores like Home Depot and Lowes to grab supplies for when the Hurricane hits. Home Depot activates a disaster response plan in response to prepare there stores of the increase intraffic, During this plan store managers are asked to freeze prices and move storm related product to the front of the store. Lowes along with Home Depot deployed hurricane command centers, these were designed to monitor Hurricane movements in order to mobilize resources to affected areas as quickly as possible.
By simplying understand how news affects stock prices you can put yourself in a position to profut from the market.Companies develop business strategies to capitalize and increase profits whenever they expect an increase in sales due to high demand of their products. As an ivndividual why not implement a similar approach? It is not a bad way to make money at all.