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    juty1234
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    While expanding sales and increasing earnings are positive signs for a company, they do not necessarily mean the stock price will rise. In many cases over the past decade, companies have seen rising earnings but declining stock prices as investors have become less willing to pay as much for earnings and prefer lower-risk bonds and certificates of deposit that provide higher yields. Additionally, the increasingly cyclical nature of the American economy and higher inflation rates in recent years have made the concept of growth less certain.

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    While expanding sales and increasing earnings are positive signs for a company, they do not necessarily mean the stock price will rise. In many cases over the past decade, companies have seen rising earnings but declining stock prices as investors have become less willing to pay as much for earnings and prefer lower-risk bonds and certificates of deposit that provide higher yields. Additionally, the increasingly cyclical nature of the American economy and higher inflation rates in recent years have made the concept of growth less certain.

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    © All Rights Reserved
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    4 views3 pages

    Hi Sheila

    Uploaded by

    juty1234
    While expanding sales and increasing earnings are positive signs for a company, they do not necessarily mean the stock price will rise. In many cases over the past decade, companies have seen rising earnings but declining stock prices as investors have become less willing to pay as much for earnings and prefer lower-risk bonds and certificates of deposit that provide higher yields. Additionally, the increasingly cyclical nature of the American economy and higher inflation rates in recent years have made the concept of growth less certain.

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    © All Rights Reserved
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    , thi
    s doe
    s no
    t necessaril
    y mea
    n
    tha
    t th
    e company'
    s stoc
    k mus
    t ris
    e i
    n price. In recent years there have been hundred
    s o
    f
    companie
    s reportin
    g expandin
    g sale
    s an
    d increasin
    g
    earnings
    , bu
    t declinin
    g stoc
    k prices. I
    n numerou
    s case
    s th
    e
    combinatio
    n o
    f risin
    g earning
    s bu
    t declinin
    g stoc
    k pric
    e i
    s
    a long-ter
    m tren
    d tha
    t ha
    s laste
    d a decad
    e o
    r longer
    , an
    d
    indicate
    s tha
    t investors ar
    e no
    t a
    s willin
    g t
    o pa
    y a
    s muc
    h
    fo
    r earning
    s a
    s the
    y onc
    e were
    . Wit
    h inflatio
    n pushin
    g u
    p
    th
    e yield
    s availabl
    e fro
    m bond
    s an
    d certificate
    s o
    f deposit
    ,
    man
    y investor
    s ar
    e satisfie
    d wit
    h placin
    g thei
    r mone
    y
    ther
    e rathe
    r tha
    n i
    n lower-yieldin
    g an
    d riskie
    r stocks
    .
    Th
    e concep
    t o
    f growt
    h ha
    s bee
    n shake
    n eve
    n more
    b
    y th
    e increasingl
    y cyclical natur
    e o
    f th
    e America
    n
    economy
    , th
    e resul
    t o
    f th
    e highe
    r rat
    e o
    f inflatio
    n i
    n recen
    t
    years
    , whic
    h ha
    s i
    n tur
    n bee
    n cause
    d b
    y th
    e numerou
    s
    big-spendin
    g program
    s favore
    d b
    y Washingto
    n politicians.
    Bi
    g program
    s requir
    e bi
    g money
    , an
    d i
    f th
    e fund
    s squeeze
    d

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