As most investors know, December may be a tricky time in the financial markets. With the holiday season in full swing and bonfires of capital infusions from throughout the year fading, the market is more prone to fluctuations. Unfortunately, a report released today indicates that the market may be risking a major downside at the end of this year.
The report, which cited financial data from major sources such as Bloomberg, suggests that several sectors like technology and health care have been experiencing higher levels of volatility. Certain key macroeconomic indicators such as bond yields have also been falling due to factors like the US-China trade tensions and further uncertainties that hamper economic growth.
As a result, investors have been confronted with a high-risk environment that calls for extra caution and heightened vigilance. As a conservative approach, traders may be wise to play with smaller trading amounts and pick the stocks more carefully.
Furthermore, investors should pay attention to the broad picture of macroeconomic factors and avoid making decisions based on short-term factors. It might be wise to stay defensively posture and wait for signs of stability before making any risky investments.
Finally, it is worth noting that today’s market environment is a lot different from the pre-2008 phase, when rises in house prices and stocks almost always went hand in hand. With the newfound risks and uncertainties, one concerningly expected market downside cannot be excluded. Therefore, investors need to behave with wisdom and precaution, and any moves should be based on prudent and in-depth analysis.