Do Stock Splits affect price movement?

Stock splits occur when the price of the stock lowers and investors get more shares to make up for the lowered price. So do they actually affect how strong a stock will be in the future? Most investors and traders believe that splits will in fact cause a stock to outperform the rest of the market for these two reasons. 1. It Shows GrowthnnIf a stock has already split it shows that the company is already growing and that can have an enormous positive affect on a stock. It makes sense most companies that split once will probably keep heading up and keep splitting again and again in the future. 2. It creates a psychological levelnnIf a stock is trading at $100 and has a 2 for 1 split, it would be trading at $50 now. Even thou there would be twice as many shares people will still see $100 as a psychological level. The stock was ounce trading at that level, so it should trade at that level again right? This causes new buying pressure to come in and can also influence the price of the stock. Stock splits have been shown to outperform the market in general, but you need to remember not to take it as a standalone signal. It is much more important to rely on the trend and the fundamentals then to just buy a stock that has just split and hope for the best. But that doesn’t mean you can’t look for stocks that are splitting to increase your odds of being profitable. For more on stock splits visit http://www.stocks-simplified.com/Stock_Split_Definition.html For some stock tips visit http://www.stocks-simplified.com/stock_tips.html