Investor expectations concerning interest rate movements and future inflation often guide investment purchase decisions. Expectations of future inflation rates are built into the interest rates and for example, fixed-rate bonds offer no protection against unanticipated and sustained periods of high inflation. Conversely, a variable-rate bond may offer some inflation protection. Investor expectations of the future earnings and dividend payments of a common stock determine the market value, although the value of assets is also an important factor. A great company in a growth industry however, can still perform poorly if the company disappoints the consensus of analysts' earnings estimates. Large transactions may affect prices temporarily creating bid-ask imbalances. Stock prices can also be affected by rumours, or by public tender offers.

Many tools exist that can be used to value equity securities. It is recommended that some form of analysis be performed before purchasing a corporation's stock. Company performance analysis usually includes a review of the historic trends. Although past performance is no indication of future performance, a reasonable assumption is that things will continue as they have in the past.

Fundamental analysis is the evaluation of a company based on its historic financial statements combined with an analysis of the company's future prospects.