Dividends

Most corporations that are in a low-growth stage will pay dividends because there are not as many projects in which to reinvest earnings. There are two things a corporation can do with their profits: add them to retained earnings or pay them out as dividends. This means that retained earnings will be decreased by the amount that is paid out in the form of dividends. On the date of record for a dividend, the price for a share of stock will generally decrease by about as much as is paid out per share in the form of a dividend.

World Events

World events can have significant impacts on stock prices. In general, they are major events and have only a one-time impact on prices. One of the most common types of world events is a natural disaster. Hurricanes, tsunamis, and unexpected frost all impact the prices of stocks. There are so many unique types of world events that it is impossible to determine a direct correlation between stock prices and all world events. In general, though, a positive event is going to help stock prices, whereas a negative will cause a decline in stock prices.

Momentum

Momentum is a factor that can be a double edged sword. In most situations it is true that success begets success, although judging future success based on current success can be difficult. This makes momentum hard to factor into a stock price. If a price is on the rise, it may have the momentum to continue building. Conversely, a stock that is falling may continue to fall. The trick with momentum is knowing when it is running out—at this point you need to liquidate your position in a stock and take your profits.

Corporation Specific Factors

References

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