People should not expect share market to grow again until the volatility rate decreases as per Data trek research on Thursday.
WHY SHARE MARKET IS STILL FALLING
This thing will not happen until fed decides to stop raising interest rates and until we get more clarity on corporate earnings expectations heading into a potential recession next year. If people manage to understand these 2 factors and act accordingly then they can come up with better returns even in recession.
There is tremendous bull run has expected, according to previous bear market; I.E. S&P 500 gained 28% after the .com disaster in 2003, Market grew by 61% after COVID-19.
DataTrek co-founder Nicholas Colas said; in order to get high returns and volatility rate to decrease, we must have a good hand on fiscal policy and people need to show high confidence on the market. Investors are unknown about these two things, the Feb is continuously surprising us by increasing interest rate and there is no doubt that it will be lowered by Fed until mid-2023 as they announced that rates will increase again by 75 points in 2023.
“During the subsequent economic expansion corporate earnings become much more predictable, as does Federal Reserve monetary policy. These are bull markets,” Colas said
And while investors will continue to attempt to anticipate the turn in volatility and call a bottom in markets, “all we know for sure, based on the data, is that it will be more important to get and stay long US stocks in the months and years after volatility diminishes and the next rally is underway,” Colas said.
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