Market Volatility Continues
Monitoring Stock Market Volatility
Well another week is upon us and we find that there is so far no end in sight of the market volatility we’ve experienced in recent weeks – now months. As long-term investors and day traders wait out the market fluctuations to see what the impact amounts to for individual portfolios it becomes a guessing game for the average investor. USA Today reported that not only have US markets dragged on with the downward trend over-all but international impact continues to be negative driven by an 8.8% drop in Chinese industrial profits over the same period in the prior year.
Billionaire investor and hedge fund manager Carl Icahn also foresees trouble ahead in the market even preparing to release a video expounding on his view that current conditions including the US Federal Reserve’s low interest rate polices have led to what he believes could be severe fallout.
To add fuel to the fire of lost confidence on the part of investors European markets echoed the trend being generated out of the slowing Chinese economy and concerns are further fanned by the continuing issues at Volkswagen.
Is There an Upside in Today’s Market Volatility?
Whenever the investment sky is getting gloomy investors and day traders search for the silver lining that brings a glimmer of hope or a promise of better things to come. Today’s market volatility is no exception. There are positives amidst the chaos that are worth mentioning. Other reporting by USA Today reflects the upside indicators that US employment has made solid improvements and consumer spending continues to increase.
AMP Capital guidance advises that the volatility is essentially a correction not a long-term drop in value for stocks. In fact they remind investors that when a stock has suffered a market loss is not the time to sell as it turns a paper loss into a realized financial loss. A drop in stock value may actually provide a time to execute buy orders at bargain prices.
Still, overall financial analysts echo the alert that we’re experiencing a bear market not only in US markets, but worldwide.
Positive Actions during Market Volatility
Day traders are perhaps better positioned to take advantage of this market volatility than long-term investors. Taking your risk tolerance into account of course this may be the perfect time to take advantage of low stock prices that you can identify as having the potential to come back or even rise to record heights. Use of sophisticated modeling and historical data can provide the confidence needed to make the moves needed for short-term gains.
Looking at reaction to the market volatility where many investors are selling off holdings at reduced values provides just the potential day traders seek out for quick gains as stocks rebound in value. The Fiscal Times points out that times of a market correction are not the time to get nervous and sell at a loss. Retention of holdings will likely reward investors with recovery and even gains and/or dividends.
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