Can We Bank On A New Normal In The Stock Market?
Ever since the market crashed back in 2008, the stock market has been one giant rollercoaster ride and hang onto your hats because the ride doesn’t appear to be even close to ending. Is the volatility and unpredictability we are experiencing in the markets the new “normal”? Some experts have been comparing the patterns in the U.S. to those that have played out in Japan. Japan, like the Fed, has been doing massive monetary easing, which has caused their bond yields to more than double, and has caused extreme volatility in their markets. With the recent announcement that the Fed is anticipating slowing down on quantitative easing, we will be seeing unparalleled volatility in the U.S. markets as well. The real question on everyone’s mind at this point is, how is an investor to take control of his investments in today’s economy?
The Problem With Monetary Easing And The Stock Market
The main problem with monetary easing is that it builds up the markets. Interest rates were kept at zero for borrowers, corporations and individuals alike benefited from the low borrowing rates. Additionally, an equity bubble was built to instill faith in the stock market and to make people feel richer and better than ever. This creates a false sense of security, which causes people to pull out their credit cards and spend money, which in turn bolsters the economy. During this process, we are all lulled to sleep because things are looking “better” for the economy. However, as the fed makes its less than graceful exit, we can expect a harsh reality for the U.S. economy/markets. The Fed couldn’t keep up their current strategies forever; it was only a matter of time before the party had to end. However, we are about to see massive currency volatility from suppressed currencies around the world. We will also see volatility in the markets, problems with the housing market, and other falsely inflated investments.
How Does An Investor Make Money In Today’s Market?
As gloomy as this may seem, there is always money to be made in every economy, it’s just a matter of switching up some policies and preparing yourself adequately for volatility. Some options include shorting the market, shorting junk bonds, buying gold, and many other alternative investment options that will likely perform well in the current environment. For more information on your investment options, speak to a Redhawk Advisor Near you today. Don’t wait until your assets are suffering, stay ahead of the markets and use this difficult investment climate to turn a profit.