5 Reasons Now Might be Time to Put Your Money into the Current Stock Market

TIM THOMAS TIM THOMAS Learn more

Stocks managed to rise by the end of the week, aided by Federal Reserve Chair Jerome Powell's guarantee that larger rate hikes are off the table for the time being, despite recent high inflation readings.

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Powell’s statements calmed frayed nerves and sparked a rebound in beaten-down risk assets in a market plagued by fears that more aggressive monetary tightening may tip the economy into a recession.

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The easy money period appears to be coming to a close. With that, the global bull market seems to be fading. It remains to be seen how far inflation will increase and whether central banks throughout the world will be able to control it.

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Rising yields indicate that interest rates will remain positive for the foreseeable future.

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Is it the Right Time to Invest in the Current Stock Market?

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Volatility is the defining aspect of the stock market currently, and the VIX volatility index is the clearest indicator that the selling has been exhausted. A VIX at 36 is two standard deviations away from its mean. We are well and thoroughly oversold when the VIX reaches 36.

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Rising interest rates, as the Federal Reserve tightens monetary policy, and rising inflation and uncertainty about the Ukraine crisis continue undermining the current stock market’s outlook. However, companies’ ability to use cash could reduce a few concerns of investors.

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Healthcare stocks have historically received higher bids during periods like these because growth investors jumping out of tech need to cycle into another sector, and their options have narrowed over time.

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For example, there are “growth” retail names that investors would resort to during periods of market volatility not long ago, but the rise of online retail put an end to that trade.

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5 Reasons Now Might be Time to Put Your Money into the Current Stock Market

Stocks managed to rise by the end of the week, aided by Federal Reserve Chair Jerome Powell's guarantee that larger rate hikes are off the table for the time being, despite recent high inflation readings.

Powell’s statements calmed frayed nerves and sparked a rebound in beaten-down risk assets in a market plagued by fears that more aggressive monetary tightening may tip the economy into a recession.

The easy money period appears to be coming to a close. With that, the global bull market seems to be fading. It remains to be seen how far inflation will increase and whether central banks throughout the world will be able to control it.

Rising yields indicate that interest rates will remain positive for the foreseeable future.

Is it the Right Time to Invest in the Current Stock Market?

Here are some of the most important stock-buying principles right now, as well as how they apply to the present market condition.

Volatility is the defining aspect of the stock market currently, and the VIX volatility index is the clearest indicator that the selling has been exhausted. A VIX at 36 is two standard deviations away from its mean. We are well and thoroughly oversold when the VIX reaches 36.

1) The Significance of the VIX at 36

Rising interest rates, as the Federal Reserve tightens monetary policy, and rising inflation and uncertainty about the Ukraine crisis continue undermining the current stock market’s outlook. However, companies’ ability to use cash could reduce a few concerns of investors.

TIM THOMAS

TIM THOMAS

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Learn About Emerging Trends In: Mortgage rates Buyer demand Home values Real estate investor trends

Healthcare stocks have historically received higher bids during periods like these because growth investors jumping out of tech need to cycle into another sector, and their options have narrowed over time.

2) S&P 500 Sectors Are In a Better Position to Rally

For example, there are “growth” retail names that investors would resort to during periods of market volatility not long ago, but the rise of online retail put an end to that trade.

Swipe up now to read the full post!

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