subject: Market Predictions [print this page] In everyday life, people are faced with predictions. This is because people constantly try to discover what will happen ahead of time. Predictions often involve eventswhat the weather will be, who will win the game or match, who will bring home the crown, and the like. These predictions are set in motion by decisions. One of the most important kinds of predictions is market predictions. It is important because it is tied to the economic machine, the cycle of money. Like all other predictions, market predictions are also grounded on decisions, and crucial ones at that.
Market predictions, also known as stock market predictions, is the task of trying to figure out the future value of a company stock or other financial means traded on a financial exchange. A successful prediction of the future price of a stock could result in remarkable profit. There are those who claim that the rise and fall of stock prices are unpredictable, since the movements are affected by random factors. Then there are those who disagree; some people maintain the perspective that there are means which allow those who make market predictions to acquire future price information.
Because of market predictions, there is what is called prediction or predictive markets. These are speculative venues created for the sole purpose of making these market predictions. Usually, the stock price value is associated to a specific event or parameter. For instance, market predictions will be made during an election; this is because the final value will rely on whether or not the next president will be a Republican or Democrat. Market predictions are also made based on a parameter, such as the total sales in the subsequent quarter. Indeed, market predictions are based on the probability of an occurrence or expected value as dictated by a parameter. Market predictions are done like betting exchanges, which means the bookmaker can make a prediction without any risk.
As was mentioned earlier, decisions drive these market predictions. People steer the stock market and the predictive market through what they decide to do. Those people who buy low stocks and sell them high are lauded for making market predictions better, while those who buy high stocks and sell them
low are criticized for diminishing the market predictions.
The public can make their own market predictions. There are prediction markets which are open to the public, such as Betfair. It is the biggest prediction exchange in the world, trading $28 million in 2007.
