Day: 20 September 2022

But how do the markets behave?

In the chart you can see that bullish markets are much longer and more powerful than bearish ones.
In recent years, they are generally very short.

Yes, collapses happen, but they are fleeting, for many reasons:
Inflation, money printing, the model of the world economy of constant growth, new corporate giants and growing consumption.

No one is ever sure what will happen this time, but there are not so many options, the markets will have to beat inflation and those who want to save their money will have to invest in good corporations.

Yes, it is the growing business, retail, raw materials, and ultimately technology, pharmaceuticals, finance, are the ones that will rebound price shocks the fastest.

Nowadays, everything is happening very quickly, much faster than 10-20 years ago, the shock of the pandemic was redeemed in less than 6 months, before it ended! But now there is a systemic crisis, liquidity is being taken away from the market, this is a different situation, and we will see how the regulator will cope with it.

The expected stop at 3-4% will probably not happen, the released data showed an increase in inflation, which means that the FED will have to take unpopular measures and tighten liquidity. There may even be an increase of 0.5-1% at once.

The fact that we are starting to live in times of expensive money will take some getting used to. It is possible that we will see the rate at 5-6% next year, and yes, it will be a shock to the market, but there will be no other options.

We sold all our positions on bonds yesterday and will stand aside from this market for now, until clarity appears.

This situation will increase the risk of defaults for many issuers, so I recommend that everyone carefully monitor their so-called conservative investments.