Since the market crash in 2008 investors have been patiently waiting for the market to recover, stabilize and put their investment portfolio back in the black. Market fluctuations make investors nervous because people don’t like uncertainties and I don’t know a lot of people who like to lose money.
Enduring market fluctuations for long term investing
The amount of fluctuations in your investment portfolio depends on the types of investment options that you have and the amount of risk that you are willing to take. The key to surviving market fluctuations is to focus on the long term. When investors purchase equities and stocks they should be aware of the associated risks, they should also know that short term fluctuations in the value of their investments is a minor speed bump towards your long term goals.
A positive outlook for the market
If you read daily market news from sources such as Bloomberg and CNN you may constantly be aware of what is happening in the market right now, but do you know how to keep up to date on what is coming? Nobody has a crystal ball to predict what is going the happen in the market, but there are several economic factors that show signs of positive things to come.
4 positive signs to be on the lookout for a market upturn:
Decreasing unemployment rate. When the market crashes it seems that everything comes to a halting stop, this includes the hiring of new employees. During an unstable economy corporations are reluctant to invest money in the hiring and training of new employees. If you start to see more job posting and hiring freezes being lifted it’s a good sign of good things to come in the market.
Decline in personal and corporate bankruptcies. In 2008 and 2009 it seemed like everywhere you turned you saw and read statistics about the number of people who are defaulting on loans and losing their homes due to personal bankruptcies. However, in recent years we are hearing less and less about corporations and people overspending and declaring bankruptcy. This is definitely a sign of an upward spiral in the market.
Retail sales increase. When the market crashes and people lose their jobs they don’t have extra money to spend on personal items and this brings the economy to a screeching halt. When people aren’t spending there is more supply than demand and this does not help our economy grow. However when the market is rising and companies are hiring employees people have money to spend. When there is more demand then more supplies have to be manufactured and this creates new jobs.
Increase in the money supply. Many banks are offering high interest savings accounts to entice consumers to make deposits and investments. When the economy is unstable people are reluctant to put their money in a bank and they are more likely to keep their money at home. If no one is investing in the market then the market can’t increase.
Hopefully these signs give you hope that the market is returning to it’s former glory. What are some other signs of a market rebound are you seeing in your area?