Part 4/11:
Basher delineated two primary drivers of stock price movements: sentiment and fundamental results. He explained that while fundamental results manifest quarterly, sentiment-driven trading occurs daily. This recurrent emotional landscape means that investors can expect volatility without losing grasp on the fundamental value of their investments over the long term.
Investors can, however, get caught up in the “noise" of stock market fluctuations, especially in today's digitally-driven media environment, where headlines can move market perceptions almost instantaneously. Understanding the difference between signal (information that truly impacts company fundamentals) and noise (irrelevant information that only serves to confuse) is critical for investors.