It's been a wild and wooly couple of weeks on the world stock exchanges. But is the latest slide grinding to a halt...or just taking a breather before tumbling some more And more seriously, what does it mean to shrewd low-priced stock speculators?
Wall Street recently stumbled to its worst week of the year, and world exchanges dropped dramatically on fears about rising rates and slowing growth. After rising about 9% in the 1st four months of the year, the DJX business average has fallen about 6.5% from a six-year high, reached May 10, 2006.
Stocks have been ailing because low-priced share financiers fear the Fed may be so concentrated on inflation that it ignores signs of an economic slowdown, raises rates too high and sends the economy into a recession.
World stock markets were sent reeling last week after golden-tongued U.S. Fed CEO, Ben Bernanke shocked low priced share investors in saying the Fed will continue raising interest rates to keep inflation in control.
And that decision will have a direct impact on the penny share market. Increased rates hurt low priced stock costs because investors believe it will curb economic growth and company profits.
But why is inflation heating? Higher energy costs. Traders and low priced share financiers are also worried that with the hurricane season officially under way, Gulf Coast refineries and oil production sites may be damaged again this summer and fall.
And increased rates have the power to affect the whole economy. Financial fees on cards will rise. So too will rates on mortgages and home equity loans, putting further pressure on home purchasers and a softening home market. In the final analysis it will cost more to borrow for enlargement.
But does this signal doom-and-gloom for the low-priced stock market? Au contraire. While the enticement to sell everything can be overpowering, some see this as a superb opportunity. "I would not be selling. I'd have a tendency to be buying," claimed one NY analyst.
So how exactly is this a chance? It just so happens that many firms caught in the market's downward spiral are cheaper than they used to be a few weeks ago. And as any seasoned low-priced share financier will tell you, purchasing a great penny stock when it has been beaten down isn't a bad way to make money over the long stretch.
If you can stomach some of the volatility that is. While many blue chip stockholders have problems handling the market's unpredictability...it's par for the course.
So , "snap out of it," asserted another watcher. A month of disorientating selling has brought the markets into a tasty range. Is it really possible the markets will fall more? Absolutely. In fact , no penny stock is a dead cert. But one thing is certain: "Stocks are much less expensive now than they were two months ago. ".
Wall Street recently stumbled to its worst week of the year, and world exchanges dropped dramatically on fears about rising rates and slowing growth. After rising about 9% in the 1st four months of the year, the DJX business average has fallen about 6.5% from a six-year high, reached May 10, 2006.
Stocks have been ailing because low-priced share financiers fear the Fed may be so concentrated on inflation that it ignores signs of an economic slowdown, raises rates too high and sends the economy into a recession.
World stock markets were sent reeling last week after golden-tongued U.S. Fed CEO, Ben Bernanke shocked low priced share investors in saying the Fed will continue raising interest rates to keep inflation in control.
And that decision will have a direct impact on the penny share market. Increased rates hurt low priced stock costs because investors believe it will curb economic growth and company profits.
But why is inflation heating? Higher energy costs. Traders and low priced share financiers are also worried that with the hurricane season officially under way, Gulf Coast refineries and oil production sites may be damaged again this summer and fall.
And increased rates have the power to affect the whole economy. Financial fees on cards will rise. So too will rates on mortgages and home equity loans, putting further pressure on home purchasers and a softening home market. In the final analysis it will cost more to borrow for enlargement.
But does this signal doom-and-gloom for the low-priced stock market? Au contraire. While the enticement to sell everything can be overpowering, some see this as a superb opportunity. "I would not be selling. I'd have a tendency to be buying," claimed one NY analyst.
So how exactly is this a chance? It just so happens that many firms caught in the market's downward spiral are cheaper than they used to be a few weeks ago. And as any seasoned low-priced share financier will tell you, purchasing a great penny stock when it has been beaten down isn't a bad way to make money over the long stretch.
If you can stomach some of the volatility that is. While many blue chip stockholders have problems handling the market's unpredictability...it's par for the course.
So , "snap out of it," asserted another watcher. A month of disorientating selling has brought the markets into a tasty range. Is it really possible the markets will fall more? Absolutely. In fact , no penny stock is a dead cert. But one thing is certain: "Stocks are much less expensive now than they were two months ago. ".
About the Author:
To get all of your questions addressed about finding the top source in making great investments, visit Market Timing and It's Meaning to Financiers and read our feautured financier solutions that works. See more related and reliable articles at Stock Trend.
No comments:
Post a Comment