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Determine whether stock prices are affected more by long-term or short-term performance. Provide an example of...

Determine whether stock prices are affected more by long-term or short-term performance. Provide an example of the effect that supports your claim.

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Answer #1

Stock prices are affected more by the long-term performance because short term performance can only affect the immediate movement of the stock price whereas long-term performance of the company will be deciding the ultimate road for the company.

it can be said that the short term effects are not sustainable for longer periods and long term trajectory of a company will be deciding the future of a company and it will also decide the stock price of the company in the long run.

For example, during the coronavirus crisis all the companies like Apple and Amazon along with Tesla had fallen from their highs about 40 to 50%, whereas long-term trajectory of these companies are higher and they have recovered almost 100% to 400% From the lows within a span of three months so it can be said that long-term trajectory of a stock will be deciding the the stock performance.

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