Most of what youve heard about the stock markets gyrations.jpeg
Merchants on the ground of the New York Stock Exchange last week. They do not know what will happen to stocks more than they do. (Spencer Platt / Getty Emochem)
With a market for securities that are not seen well, the investors are concerned about the future of their governor and the horizons of the recession resulting from Will Trump from Will or did not follow up with his identification threats.
This is not the right place for advice on how to trade the stock market. When I scan the upcoming market formation to the email and the investment sites that I visit regularly, I find that they fall into two balanced categories on an equal footing: these advice, “don’t worry, be happy”; And those who expect catastrophic crashing, or at least a stagnation that increases significantly on the horizon.
Since this is what I usually hear if the market is on tears or stagnation, I remember the observation that William Goldman, Oscar -winning script “The Princess Brid”, “Butch Cassidy and Sundance Kid”, is made from Hollywood: “No one knows anything.”
Sell to the sleeping point.
JP Morgan’s advice to a friend said he was so tense about his stocks that he could not sleep at night
However, it may be useful to put the latest procedures in the stock market in its correct perspective. We can start with the fluctuation of days and last weeks.
On March 10, Dow Jones Industrial decreased 890 points, or 2.8 %; The index of 500 of the standard and the wider is 2.7 % and the nasdaq index, which tracks the shares of technology, decreased by 4 %. On the day before, Trump refused to exclude that his economic policies could produce stagnation.
The feelings of the market were disturbed throughout the week. On Thursday, the S&P 500 “Correction” – a 10 % decrease from its highest level, which was recorded in this case on February 19. The retreat of some commentators in the market inspired the dust of the ancient market index known as the theory of Dow. This indicator assumes that any step in Dow Industries must correspond to a similar step in the DOW transfer index.
“Both of them were hanging last week,” deep concerns about correcting the wider market, “James Gordon of the Daily Mail wrote.
However, whether Dow’s theory is related to today’s economy. It was formulated at the end of the last century, when the industrial output was in heavy machines and material goods that had to be shipped by railway companies that dominate the transportation sector.
Today, more than a third of the thirty companies in Dow Industries deal in financing, insurance or high -tech and does not make products that need to be transferred physically.
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However, on Friday, a relief march brought, with Dow 674.62 points, or 1.7 %, S&P increases 500 2.1 % and NASDAQ by 2.6 %. This was not enough to erase the losses of the whole week, but it was followed by another boom on Monday, when DOW rose by 353.44 points, or 0.85 %, S&P by 0.64 % and NASDAQ by 0.31 %.
Nothing means that the legendary clouds that have reduced Dow Dow by 1.65 %, S&P by 3.5 % and NASDAQ by 7.8 % so far this year will not resume or get worse. But it indicates insufficient tracking the stock market by short -term moves.
Commentators on the market are usually advised to invest in harsh suspension during periods of fluctuations such as these. This was historically sound advice, although it is not equal to everyone.
It works better for those who suffer from more distant horizons, such as families in the beginning or mid -years to their years, which have more time to capture long -term growth in stock prices and recover from the inevitable periodic shrinkage.
For those in or near retirement, the environment may seem more concerned. A 65-year-old young man was based on the stock portfolio to see him in imminent retirement in 2023, to face the decline in the stock market in nearly five in 2022-is enough to force many of these families to reconsider their retirement options.
Politicians who are trying to reassure voters and investors often seem to be as if they were drunk on the negative aspect of their own policies, but this does not always mean that they are wrong. president Trump’s Treasury, Scott Beesen, entered this tinnitus on Sunday on “Meet The Press” in NBC, when he declared, “health corrections. They are normal. What is unhealthy is straight, and that you get these markets of euphoria. This is the way you get a financial crisis.”
Axios stated that with these statements, bessent, veteran executive director in Wall Street, “broken with Orthodoxy”. In fact, his view of corrections was completely consistent with Wall Street Orthodoxy. However, its effects on the fact that “ecstasy markets” always produce financial crises, doubtful – markets can maintain their outbreaks for years without raising anything like the crisis.
Former Federal Reserve Chairman Alain Greenban warned of the “irrational abundance” of the stock market in 1996, but despite the bubble of the point bubble in 2000, a financial crisis did not occur until 2008, that is, 12 years after the Greenspan-noticed-it was operated by the enlarged housing market, not the stock market. However, Bessent’s observation has been considered as a deaf defense of economic policies that are not popular with Trump.
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The same phenomenon received President Nixon’s announcement in May 1970 that “if I have any money, I will buy shares at the present time.” Coming, as happened in the 17 -month bear market teeth (longer and more severe since World War II) and during the recession that began last December, it seemed as if he was trying to save his reputation as a host of the American economy. But it was previously: the market has turned into positive returns in the seven of the next ten years, and began a standard bull race that may not run its path yet.
As I recently wrote, Pillars About whether those familiar with the White House may play the market through Trump’s ads in the foreground plans to impose or withdraw customs tariffs, it is dangerous to attribute the movements of the stock market to news developments. This may be true, especially given Trump’s tendency to announce the policies that are not implemented.
The favorite commentator on the stock market, the asset manager, Barry Rytholz, urges his followers to “control noise, stop television, avoid hunting, wild stimuli, and chaos” produced by Trump. “Instead, focus on what is really happening.”
Ritolz notes that the customs tariff for Canadian and Mexican goods are a moving goal, and often not implemented. Illon Musk’s claims were exaggerated for the demobilization of the collective workers and the sharp budget is reduced through the Doug process.
Among the most actually occurring policies, from the Ritholz point of view, an extension of Trump’s tax discounts in 2017, which preferred companies and wealthy people, and a federal trade committee that looks better on the large ftc in Biden.
It is fair to expect Trump’s policies to have an impact on economic growth, including in California. The preferred vision by economists and business leaders is that what he did so far is to pump “uncertainty” in economic planning.
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Of course, the future is always uncertain. In 2010, when the Republicans complained that the “uncertainty” resulting from Barack Obama’s developing plans for taxes, health care and financial reforms made business leaders who possess terrorism under their family, noticed that the United States spent three decades facing the threat of nuclear genocide from the Soviet Union. Which – which The uncertainty was hovering during the most prosperous period in our history.
We may be at the height of the uncertainty of Trump’s current term. In reference to the pickles on the definitions, the American Chamber of Commerce quotes a member who is concerned that “the threats and uncertainty have made it difficult to make commercial decisions.” Earlier this month, Clement Bohr indicated the UCLA Anderson economic expectations that “at this level of uncertainty, companies stop employment. You will wait.”
This indicates that the waiting period will only continue until the image of Trump’s policies becomes more clear (assuming that it will work in time). The stock market, after all, is a mechanism for measuring future expectations. However, no one can be sure, to what extent does he look forward – only that he is generally looking forward more than tomorrow.
Everyone has an approximate portfolio or bonds of a different mental image of what they want to accomplish through their investments, if not how to get there. How much is the risk you are ready to take? What do you want money? What is the duration of your investment horizon?
JP Morgan was patience with their acquaintances who wanted to pressure all these considerations in one multi -purpose form. A friend told him that he was so worried about his stocks that he couldn’t sleep at night. He asked, what should he do? Morgan’s response may be fabricated, but it includes the axiom that investors must release their emotional response to the markets from the cold analysis that should be behind investment decisions, if possible.
According to the story, Morgan replied, “Selling to the sleeping point.”
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This story originally appeared in Los Angeles Times.
