Why are investment markets so volatile?
The last two weeks has seen the most amazing of rides on international stock markets with each day bringing new worries, new concerns and new hope, but why are they so volatile? Is the future so uncertain?
The fact is that at this moment in time we have the bailouts on the positive side but the immediate threat of recession on the negative side. On a daily basis it seems as though investor sentiment flip flops between the two and uncertainty is reigning supreme. While markets will eventually settle down there are predictions of more gloom before we see the day light and the storms have passed.
It is almost impossible to suggest when markets might bottom out suffice to say that when we do near the bottom history has told us it will be rocky, it will be volatile and we may be subjected to some enormous swings in sentiment. Even when the bottom of the markets arrives it will not be a case of bouncing back to former levels but more of a steady return of investor confidence and increase in share prices.
Settle down and make sure that seat belt is clipped in because we may have some way to go yet!
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