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| *Ostroff, Fair and Company>>>Investing |
Stock prices, 52 week high.....? |
In business, what is the meaning of 52 Week High or Low? thanks That is a really good question. I am not sure though that I am going to be able to do it justice. I will give it a try. When stock prices hit a 52 week high or better yet an all time high people get really optimistic and bullish. People tend to spend their money, especially those who are taking their profits out of the stock market. Also highs tend to bring more people into the market causing prices to increase even further and cause more people to become optimistic. Basically, it is real good for the economy. When stock prices hit new 52 week lows, the situation is exactly the opposite. People become very pessimistic. They begin selling their stocks. They stop spending their money. They become really worried. Businesses begin selling less as a result especially yacht salemen. The selling in stocks triggers more selling as people begin to really become scared. There are likely also to be margin calls for over extended speculators thus driving stock prices lower. Stock based mutual funds begin getting a flood of sell orders as people move their money into the money market. The mutual funds have to sell their stocks driving prices down further. Everyone with a 401k account starts really feeling bad. And who does not have one of these? Beer sales and whisky sales might increase but that is about the extent of it. Well maybe Cambell soup sales also. This is the time people should be buying stocks but instead they are selling stocks. Well I take that statement back. They should not be buying yet. These trends sometimes run much longer than one might imagine. The 1972 sell off lasted until 1975 but did not really end until the 1983 or so. Quite simply it means the highest it has been in the last year. When a stock sells on one of the many exchanges in the world, the highest price the stock has reached in the last year is tracked, as is the lowest price. These are only two of the many statistics that are tracked regarding stocks. It's great that you're educating yourself about it! Keep it up! |
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