Uncertainty is the answer
There is a famous say in the market - "Do not time the market". Markets across the world prove the same in some way now a days.
It is always said that strong funadamentals will help an investor in the long term. But the real situation across the world is very much different. The markets have become so complex that it is now tough even for an experienced analyst to realise the fututre movements.
Markets are reacting strongly to news'. The worrying factor is that the news coming out daily are almost contradicting. The financial markets in the west are facing a credit crunch and are in serious sub-prmie woes. It is expected that US will fall into a recession. For the past 3 - 4 months, the expectation of a US recession has found a strong backing with the economists. At times, the economic data and the financial results from technology firms defy the specualtion of a recession. It is true that a recession will take some time to affect the technology sector. But at the same time, recession can also boost the technology sector to increase the margin in some sectors.
Again this philosphy is true for all the sectors including the financial sector. Another worry is the housing slumpdoewn in US. There is a worry across the world, among the people of business fraternity - 2008 will see a US recession and so a slowdown in the world economy. This is evident from the performance of world markets and their choppiness for the past few weeks. But the policy makers in the west are sure that recession can be contained in some way or other like cutting down interest rates and pumping money into markets. Meanwhile, the developing economies or to be precise, the asian economies and the people felt they are insulated from a meltdown in the west.
Keep into account all these things and if analysed more, the uncertainity increases. Yes, Uncertainty is the buzzword now.
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