In last month's blog, "Jelly Beans and Investing Wisdom," we explained how group intelligence leads to relatively efficient markets. Now let's look at how prices are set moving forward. Understanding this will help us see how to work with the market rather than fighting it.
What causes market prices to change? The answer begins with the never-ending stream of good, bad and ugly news. For example, when there are reports that a fungicide is attacking Florida trees, orange juice futures may soar, as the market anticipates shrinking supply.