HS Visio|Market analysis
The atmosphere on the stock market is gloomy. Investors should be prepared for the fact that the new emerging market is not just around the corner, writes Alex af Heurlin, editor of HS Vision.
Do you remember rocket boys? They filled the online discussions about investing last year as the market broke records and new investors made a fortune in shares of growth companies. The whole stock market hustle and bustle of recent years has intensified in rocket buoys.
Virtually all asset prices rose between spring 2020 and summer 2021. The result was an investment carnival where all investors thought they were new warrenbuffs.
The rocket buoys have disappeared from the some during the early part of the year. If someone uses them, he does it ironically.
Other silent signs suggest that the very investor hype is over. Fewer and fewer share screenshots of the return on their portfolio in Some. Discussors in the Inderes forum no longer take tattoos of their favorite company logos on their bodies.
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Fourteen years is a long time to wait for returns, but that option too should be kept in mind.
Reason the cooling of the mood is obvious. Interest rates are rising, stock prices are falling, investing is difficult again. The Nasdaq technology index has plunged 30 percent from last fall’s highs. April was the weakest month for Nasdaq in more than a decade, and the same spending has continued in May.
There have been problems beneath the surface for some time. The most speculative technology companies started slipping on the stock market last fall, and from there the slip has spread more widely to the market. Even Apple, the most valuable company in the United States, has fallen 20 percent during the first half of the year.
Multi the investor recalls the events of two years ago in the water language. The stock market collapsed at a record rate in the spring of 2020. The world’s most watched stock index, the S&P 500, fell more than 30 percent in just four weeks in February-March. The recovery was also fast: the S&P 500 recorded new price highs in late summer 2020.
However, the corona pit was a stock market boom. It is not worth counting on the recovery to come as fast or as strong this time.
Typically, a declining market is a test that lasts for years. It’s crying, anxiety, and bankruptcies, not a one-time discount sale with a Christmas lunch.
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Stock pickers think that good companies are doing well and their prices are rising faster than the index.
Of the year A better benchmark for current spending than the sudden collapse of 2020 can be found 20 years ago. When the IT bubble burst in 2000, it took more than two years for the Nasdaq index to bottom out.
It started a years-long, exhaustingly slow rise. Investors in Nasdaq in March 2000 did not get their returns until 2014.
Fourteen years is a long time to wait for returns, but that option too should be kept in mind. The current downturn in the market may have seemed long, but it has only been going on for a while. The Nasdaq recorded the highest readings in history on November 15, 2021, nearly six months ago.
Stock pickers think that good companies are doing well and their prices are rising faster than the index. Maybe so, but when the price is wrong, the investment is bad, no matter how good the company is.
22 years ago, the number one star in the market was Cisco, known for its routers. The company was then a quality company and still is. Despite the quality, Cisco’s share price lost nine-tenths of its value when the IT bubble burst. The rate is still lower than in the spring of 2000.
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