A Sideways Market
Posted On Wednesday, November 28, 2012 at at 6:03 PM by Finance Fanatic
Thanks to an election year and now the looming possibility of the "fiscal cliff", markets are finding themselves moving sideways. Many economists consider these types trends as the time to be out of the market, as it makes it very hard to consider whats happening in the future. Here are a few things that we do know is around the corner and how it might effect markets going forward.
Record Low Interest Will Come to an End
The US is enjoying the lowest interest rates ever (for those that can qualify for a loan) and banks are even enjoying it more. It still boggles my mind with these type of interest rates, we are still seeing rather flat (slightly increasing) home prices. In most time periods, available financing of this type would send prices sky high, as people raced to lock in rates. However, being the complex market we are in right now, we are seeing the home price market flat.
The fact is, eventually these rates need to come up. This is how the economy works. Bill Grossman thought this would have happened last year. He was wrong. It is impossible to speculate the When, but be sure, when inflation begins to show its head, the Fed will be quick to respond. At that point, watch out for real estate. I do not want to see how a housing market responds in this economy with 6-9% interest rates.
Fiscal Cliff
I think it is safe to assume that neither Republicans or Democrats are evil enough to let this thing happen, so I am sure we see a resolve before the deadline. In the end, the republicans will most likely budge and forfeit tax hikes for higher wage incomes. Either way, we are heading toward an era of higher taxes, which in turn will directly effect businesses. Commodities, utilities, and gold have to look good to me, as any tax hikes will be sure to slow industry and tighten credit.
International Turmoil
Sometimes it seems like it's never ending. Between Iran, Israel, Palestine, and the European debt crisis, there is much to be cautious of when looking globally. Any jolt to either economic or act of war is sure to make markets uneasy. Right now, it seems as though investors are comfortable with the uneasy conditions, but this could change over night with an unforeseen event.
It is a dangerous time to be in the market right now. We will see a lot of changes in 2013, both in policy and in economy. As for now, and I remaining very conservative in my investments, at least until the forecasting fog settles a bit.
Record Low Interest Will Come to an End
The US is enjoying the lowest interest rates ever (for those that can qualify for a loan) and banks are even enjoying it more. It still boggles my mind with these type of interest rates, we are still seeing rather flat (slightly increasing) home prices. In most time periods, available financing of this type would send prices sky high, as people raced to lock in rates. However, being the complex market we are in right now, we are seeing the home price market flat.
The fact is, eventually these rates need to come up. This is how the economy works. Bill Grossman thought this would have happened last year. He was wrong. It is impossible to speculate the When, but be sure, when inflation begins to show its head, the Fed will be quick to respond. At that point, watch out for real estate. I do not want to see how a housing market responds in this economy with 6-9% interest rates.
Fiscal Cliff
I think it is safe to assume that neither Republicans or Democrats are evil enough to let this thing happen, so I am sure we see a resolve before the deadline. In the end, the republicans will most likely budge and forfeit tax hikes for higher wage incomes. Either way, we are heading toward an era of higher taxes, which in turn will directly effect businesses. Commodities, utilities, and gold have to look good to me, as any tax hikes will be sure to slow industry and tighten credit.
International Turmoil
Sometimes it seems like it's never ending. Between Iran, Israel, Palestine, and the European debt crisis, there is much to be cautious of when looking globally. Any jolt to either economic or act of war is sure to make markets uneasy. Right now, it seems as though investors are comfortable with the uneasy conditions, but this could change over night with an unforeseen event.
It is a dangerous time to be in the market right now. We will see a lot of changes in 2013, both in policy and in economy. As for now, and I remaining very conservative in my investments, at least until the forecasting fog settles a bit.
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The market has been in rally mode for almost four years now so its very wise to take a very cautious approach to the current market.
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Until the forecasting fog settles a bit its too risky to invest anywhere. So awareness is must.
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it makes it exceptionally difficult to consider whats occurring later on. Get Homework Writing Services The following are a couple of things that we do know is around the bend and how it may impact markets going ahead.
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Commodities, utilities, and gold have to look good to me, as any tax hikes will be sure to slow industry and tighten credit.
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A sideways market is one where the stock prices remain more or less constant over a period of time. This type of market may occur when there is an overall lack of trader interest, or when traders are unsure about the direction that the markets will take.
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A sideways market is characterized by minimal price movement and low levels of volatility. As a result, investors tend to experience difficulty in capitalizing on gains or limiting losses due to the lack of price direction. Consequently, trading strategies such as short-term trend following, momentum trading, and mean reversion are less effective in this type of market environment.
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The advantage of a sideways market is that it provides investors with an opportunity to buy stocks at lower prices. This creates an environment in which investors can take advantage of price movements without needing to time the market perfectly. Additionally, a sideways market allows for more strategic asset allocation since the overall trend is relatively stable.
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A sideways market can be a great opportunity for traders looking to maximize their profits. In this type of market, prices move neither up nor down significantly over a given period of time. Instead, they remain within a certain range, creating an environment in which savvy traders can take advantage of short-term price fluctuations and generate more consistent returns than if the market were trending.
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A sideways market, also known as a horizontal or range-bound market, refers to a market condition where the price of an asset or the overall market shows little to no significant upward or downward movement. Instead, the price tends to trade within a relatively narrow range, moving horizontally rather than exhibiting a clear trend.
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It's understandable that you have concerns about the current economic and market conditions. However, it's important to note that as an AI language model, I don't have access to real-time data or the ability to predict future market trends. Therefore, I cannot provide specific investment advice or predict how these factors will impact the markets going forward.
That being said, it's true that events like elections and fiscal cliff negotiations can introduce uncertainty into the markets, which can sometimes lead to volatility or sideways movement. It's not uncommon for investors to adopt a more cautious approach during such times. However, it's important to remember that markets are influenced by a wide range of factors, and their behavior can be complex and difficult to predict.
Regarding the potential end of record-low interest rates, it's true that interest rates are typically adjusted based on economic conditions, including inflation. When interest rates rise, it can have an impact on various sectors, including real estate. Higher interest rates can make borrowing more expensive and potentially affect the affordability of homes, which may impact the housing market. However, the timing and extent of interest rate changes are uncertain, and it's difficult to determine their precise effects on the market.
The fiscal cliff refers to a situation where a combination of tax increases and spending cuts would occur if certain laws are not changed. As you mentioned, it's often expected that politicians will find a resolution to avoid such an outcome. The impact of fiscal policies on businesses and industries can vary depending on the specific measures implemented and their effects on the overall economy.
International turmoil and geopolitical events can indeed have an impact on the global markets. Uncertainty and geopolitical tensions can make investors cautious and lead to market fluctuations. It's important for investors to stay informed about global events and their potential implications but also to consider diversification and long-term investment strategies that align with their financial goals and risk tolerance.
If you're uncertain about investing during these times, it might be a good idea to consult with a financial advisor or professional who can provide personalized advice based on your specific circumstances and objectives. They can help you assess the potential risks and opportunities and develop a suitable investment strategy.
Remember that investing always carries some level of risk, and it's important to make decisions based on careful analysis, diversification, and a long-term perspective. https://junkliberty.com
It's understandable to feel cautious and concerned about the global landscape, particularly when there are ongoing geopolitical tensions and economic challenges. It's true that unexpected events can have an impact on markets and investor confidence. Taking a conservative approach to investments during uncertain times is a prudent strategy for some individuals.
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It's fascinating to see how the markets are behaving in this sideways trend, thanks to the election year and the "fiscal cliff" uncertainty. As an investor, I find it difficult to predict the future in such conditions, but I'm keeping an eye on some key factors that might impact the markets going forward. For instance, the record-low interest rates are bound to come to an end eventually, and I'm curious to see how that will affect the real estate market. Additionally, the fiscal cliff negotiations and potential tax hikes have me considering investments in commodities, utilities, and gold. On top of that, international turmoil adds to the uncertainty, making me cautious about global events' impact on the markets. For now, I'm taking a conservative approach to my investments until we see more clarity in the economic and policy landscape of 2013.
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It still boggles my mind with these type of interest rates, we at Riverside Drywall Contractors are still seeing rather flat slightly increasing home prices.