Following a company’s initial public offering (IPO), an initial share price is set according to a projected supply and demand of the company stock.
Following an IPO the company share prices can be impacted by a range of factors including the volume of shares, overall market supply and demand as well as key team and personnel changes, and geopolitical events.
When selecting a share portfolio, it is also important to assess the market and follow events in that particular sector closely. An experienced broker will be able to manage your portfolio on your behalf and suggest either a sectoral or mixed share approach, but with the right industry monitoring, knowledge and a fundamentals analysis, you can also effectively manage you own share portfolio.
There are also several reasons that companies want their share prices to rise, for example, a high stock price can bring both prestige and also work to deter takeovers as well as generating strong revenues. As an additional incentive to company shareholders, many companies will offer shareholder dividends as a financial incentive to stay with the company.
Any sensible investment is worth exploring and shares provide just such an investment – they are popular and there is a wealth of information available to make an informed decision before investing.