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Due to weaker-than-expected economic data coming out of China and not-so-great corporate earnings, the market took a dive on Thursday and left the week with one of the biggest losses in seven months. Since the start of the new year, the market has not been doing very well. Compared to the last quarter of 2013, when the market was returning well, to now where the market is suffering, many fear losses and future poor performance. I believe the world is stunned at this lost, when in reality, the market is volatile and is going to have some losses. The fourth quarter of 2013 was a huge quarter, but one cannot expect it to remain at a high state. Also, with the holiday season now over, the market cannot be expected to perform as well.
On another note, with the emerging economies, like China, not having the high economic performance and growth that people are used to, the market will take a blow. Although growth is slowing and economic performance is not as strong right now, people must understand that growth cannot remain at such a high level forever. The emerging markets are turning into better investments because growth is steadying as the rising middle class population continues to increase. Naturally, volatility will lessen and the emerging markets will make for better investments.
How soon until the markets begin their rise again?
Rich, this is an interesting post.
ReplyDeleteI would think that this may be attributed partly to the post holiday season is typically sluggish. With upcoming events such as the super bowl and the Winter Olympics I wouldn't be surprised to start seeing a little more activity. Also with the installation of Janet Yellen as chairman of the board, it may be a bit more long term but there should definitely be some changes in the American economy soon
Robby, you make a intriging point here. I do believe that the Olympics and the Super Bowl will have a positive impact on the growth of markets. Another area of growth in the U.S. and Mexico is the energy industry.
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