Will Markets Really Be Vicious? It’s a matter of common sense to say that Markets are always volatile, which means the outlook is always uncertain. Volatile markets are known to be very risky to invest in terms of returns. However, the question many investors have is how will markets play out over the course of this tumultuous trading period. The answer could be rather surprising if you take a look at recent history and consider what has typically happened over the course of these volatile trading times.
So far we have seen a major correction, or stock market correction, after heavy trading on the News of Wars in 2021-9. Then we had the two largest credit disasters in history, the housing market collapse and the financial markets meltdown. These events combined with the misguided stimulus package put forth by the Obama administration resulted in a sharp drop in equity markets. And when the stimulus plan was released, there was no end to the chaos as markets fell deeper into chaos.
Since then, there have been major moves in markets, and stock markets have begun a recovery, although much slower than originally expected. If history is any indication, we will most likely see another major correction before the end of this current stock market’s correction. This time, we will once again see markets with major volatility and markets that will experience a sharp pullback.
Will the markets return to more normal behavior? Markets are not static, even during times of economic depression or panic. Markets do respond to stimulus packages, but they also tend to be very resilient to shocks to the overall economy. Historically speaking, it is difficult to project what the markets will do during this recovery phase, which will be very dependent upon what occurs in the banking sector, as well as in the health of the overall American consumer.
In addition to the stock markets, the real estate markets have taken a hit recently due to the subprime crisis. Home sales have fallen to levels not seen in over 10 years, and many of these houses will now be owned by banks and other financial institutions. When markets are affected by such large-scale changes, it can lead to massive short-term volatility in markets, which can lead to dramatic moves in prices in short periods of time.
As a result of these and other economic factors, many traders are concerned that the market could move either up or down during this uptrend. In reality, markets tend to hold their own during uptrends, because they have a natural tendency to bounce back very quickly from small price movements. Unfortunately, short-term traders have often tried to use technical analysis to predict where the markets will head and unfortunately have had a lot of failures in predicting where the markets will head.
Many short-term investors have been burned terribly by trying to predict where the markets will go, so I would suggest that you avoid any guessing game at all until you’ve gotten some experience in dealing with the markets. Don’t think that you can simply open a new trading account and “see what happens” when the markets go up or down. You won’t be able to do that. It takes time to build your knowledge base and develop the ability to determine when a particular stock is really going to perform.
If you want to get into the markets as soon as possible, I strongly recommend that you begin investing in an automated stock-picking system. These programs were designed by professional traders with years of experience and are extremely accurate, they analyze the markets for you and make investment decisions for you based on a proven and tested mathematical algorithm. They also have some of the world’s top investors as their users, which means that they have the best information guiding their picks.