Financial security




The relative worth of a financial security is dependent on the identity of the person

evaluating it and the underlying company or entity which it represents. Financial markets are the

vehicles by which the sum of individual valuations gain a tangible aspect: price. The focus of the

following research is the examination of the fundamental, non-fundamental, and technical factors

that create the price affixed to common stocks traded on United States Exchanges. This tangible

aspect, price, is never truly affixed to the security it represents since it remains in a constantly

fluctuating state whether financial markets are open or closed. The ensuing research is not an

effort to predict future stock prices; it will instead function to explain them.

The following study was conducted using four simulated portfolios created through the

website Finviz. Stocks components of the portfolios were selected at random and adhered to

varying sets of pre-determined criteria upon their inception. The target level of diversification for

the study was equity in each company at a rate twenty-five percent out of $100,000 dollars of

beginning investment capital. Final portfolio and investment values were immaterial since the

portfolios simply grouped similar assets in an effort to better study their price determinants. The

study attempts to identify fundamental, non-fundamental, and technical factors present, or

changes in these factors in order to establish a cause-effect relationship between them and the

stock’s price. Portfolios were monitored on a daily basis and further analyzed when price shifts

could be attributed to identifiable changes in the aforementioned factors affecting them. A final a

macro-level assessment of data was taken to determine the stocks that would be researched as to

create the most valid, in depth conclusions regarding the topic.

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