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Understanding the American Market


Even the most experienced financial professionals will tell you that figuring what’s going on in the market is a hard task. This has forced people to take a long-term perspective approach which means abandoning day-to-day market swings. However, it has become apparent that anyone wishing to make progress in this world should take a pause to understand the financial world. This could be someone saving for retirement, someone saving for a car or someone wishing to further his education. Going by the past few weeks, things have been quite puzzling especially for investors. This can be attributed to the fact that despite the economic uncertainty that has been created by the current geopolitical turmoil, markets continue to rise. For instance, the Wall Street has remained strong despite the hurricanes in North America and the tensions in the Korean Peninsula. At the same time, the earthquakes in Latin American have not shaken the Wall Street. This means that even the political situation in Spain and Germany have not affected the world markets like it was expected. This has not only happened in the last few months, but it has been the case in the last eight years. This has even led to the speculation that the Federal Reserve is thinking about raising the interests rates.

Going by the current figures, some economic experts warn that this could be interpreted that the federal reserve has managed to develop a reasonable economic environment that’s based on the upside scale. This strategy can prove to be crucial in helping people stay on the safe side especially on the downside. This is according to Ivy Mid Cap Growth fund manager Kimberly Scott. He refers to the assumption that everything is okay as silly. He further says that people should ensure that something doesn’t catch up with them. He gives an example of an economy that’s stronger than its people. He explains that this could lead to a faster hike rate, more than people can keep up with. Areas that would be affected most are those that specialize in high-growth stocks with technology being a good example. These are sectors that have also been performing well in the past few years. However, another executive known as Tad Rivelle had other concerns. In fact, the concerns of the TCW chief investment officer were quite the opposite of the ones expressed before. She says that going by the latest Fed’s figures, long-term bonds yields declined when short-term interest rates rose.