The stock market has turned into a bear as it rolls down the slopes of the Summer 2018 gains wiping out almost all of this year’s gains completely.
Here are my top 3:
- The President is unpredictable and because of this, I believe the market makers are always on edge, watching, and waiting to see what the President says that would impact the way business do business outside of the US borders. I think the impact of the political climate is one of the biggest macroeconomic factors that have negatively impacted the market.
- The Fed has raised interest rates multiple times this year…and there’s no reason for them not to raise them again this month. I think people kind of got blindsided by the past few interest rate hikes this year. We’ve been in recovery mode since 2008 and interest rates have been low to encourage a rebuild of the economy. But now we’re at a place that the Fed wants to strengthen the purchasing power of the dollar, so when the dollar is spent abroad it can buy more. With so many Baby Boomers retiring, I’m sure they like the sound of better interest rates for their fixed-income investments. But those of us on the younger side with heavier exposure to non-fixed-income investments like equities/stocks are not so thrilled with the outcomes.
- Market Makers are way too invested in the two things above. I really think people in Wall Street are flying by the seat of their pants and depending on the two things I mentioned before to be the reason they buy or sell a stock. Not the actual fundamentals of the stocks!
This is a semi vent post. I needed this because I’m frustrated with the way the market is handling this President and the Fed. I feel like too many regular investors like myself are the ones that get the short stick of these type of dealings because I can’t afford to buy and sell on the whim of a bunch of people (ie The Fed and President) who don’t have to tell me what they plan to do until they’re good and ready to tell me. Companies that are publically traded are required to give me their financial statements, 10-Ks, and prospectuses so that I can make informed decisions on if I want to buy, hold, or sell positions in the company. I’d much rather use objective information to decide than to let other people’s feelings that day decide which way the market will turn for me.
But until next post…hopefully, I’ll be in a better mood too.