Why do stocks sometimes go down 10% for no apparent reason?
I am talking about smallish companies - not penny stocks, but volatile biotech companies, for example.
Why do these companies sometimes fall as much was 10% in a day without any news that can explain this fall? Is it just that these are volatile stocks or are people trying to manipulate the price downward or is it something else that I am not thinking of?
I invested in two small to medium sized biotech companies and get worried when they fall by so much. I think that some very important events must have happened to justify the fall, but when I can't find anything online, I panic. Do you think that I just don't have access to some important websites for monitoring stock news? If this is the case, then can someone recommend me some of these
Any advice is helpful. If you can't tell, I just started to invest…
I panic when people like you have actual money in the market.
There is always a reason why a stock moves up or down. The reason some of hte smaller companies can post huge swings in a day is because of the lack of liquidity. Nothing against you as most people I talk to that just start investing have similar thoughts, but why would someone just starting to invest pick the hardest to analyze stock (small cap bio-tech). My last advice, dont invest in anything with a market cap that is less than a billion and that you have at least heard of before some stock guru on motley fool (website is trash) tells you about. Just my 2 cents.
Thanks for the help.
I'm investing "fake money." I just want to get a sense of how the market moves on a day to day basis, and have invested in a few different industries just to see how stocks behave differently in each of these industries. Thanks for actually giving me helpful advice
If you're investing, you really should care about the day to movement. You'll care more about the quarter to quarter, year to year, etc.
If you're looking at day to day changes, you'll end up losing all of your money.
Also, you said you're looking at small firms, so changes in outside markets plays a huge factor. Copper just made a huge move the other day, so a bio tech firm that uses copper in their products would change in price to reflect the change in price of copper.
I follow oil a bit, so if you've noticed, crude oil dropped 50% in the last few months. Companies like BP did not drop that much, but smaller oil companies have dropped by that much.
That's true, I know that all of these short-run changes won't matter in the long-run, but I end up checking my "portfolio" once or twice a day for the hell of it and get curious when stocks rise or fall heavily since I don't really have any experience in the market yet
Some of my investments in mid/small companies have liquidity problems. A single asset manager may have built a large positions (10% of the float, lets say), then suddenly decided to sell.
Well, thats gonna destroy the price for at least a few days while they sell through everything, despite nothing really having changed. I view this as more of a bargain than something scary.
Yeah, it sucks if you built a decent sized position and took the mark to market, but you should always leave some room to buy more when this stuff happens.
I just went through this exercise in the last week - largest investment is down like 10-15%, despite positive news coming out.
OP read up on quantum mechanics, it's all just random like tiny molecules and chit
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