How does the stock market work? Who decides the price of stocks? What is the logic behind the valuation of stocks?

The stock market is a platform where investors can buy and sell shares of publicly traded companies. Stock prices are determined by supply and demand dynamics—when more people want to buy a stock, its price typically goes up, and vice versa. The price of stocks is influenced by various factors, including a company's financial performance, industry trends, economic conditions, investor sentiment, and geopolitical events. Investors analyze these factors to determine the perceived value of a company's stock, using methods such as fundamental analysis (examining financial statements, earnings, and growth potential) and technical analysis (studying price patterns and trading volume). Ultimately, the price of a stock is a reflection of what investors are willing to pay for a share of ownership in a company, based on their expectations of future earnings and growth potential. read less