Wild Wild Week
The stock market has been wild lately. This past week, indices skyrocketed up and down daily, taking investors on an emotional rollercoaster.
Last Monday, investors were astounded as they watched an incredible market comeback. The Nasdaq reversed a stunning 4.9% decline to close positive—it’s biggest bounce since 2008. The Dow reversed its decline of 3.3%, and the S&P 500 reversed its 4% decline, both closing in the green. Monday’s comeback was like watching the intense Bills vs. Chiefs game last Sunday.
One of investors’ major concerns is that these wild swings in the markets are not over yet. Their portfolios are hurting right now, and experts think it might become worse as the market searches for a bottom. However, when the markets are down this much, experts say that huge moves are normal.
Investors are likely reacting to the Federal Reserve’s substantial shift in its monetary policy. The central bank is moving away from its zero-interest-rate policy. As a result, investors are rethinking stock market prices. Fed chair Jerome Powell did not indicate how much or how often the Fed would raise rates this year. However, many Fed officials have forecasted rates could be increased three times this year.
If you invest, are you positioning your portfolio for interest rate hikes soon? This week, it’ll be interesting to see how investors continue to react in the markets and the January job report releasing Friday.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
