What Should Investors Make of Bitcoin Mania?
Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios.
It is now the 10-year anniversary of when, in early October 2007, the S&P 500 Index hit what was its highest point before losing more than half its value over the next year and a half during the global financial crisis.
“The market hates uncertainty” has been a common enough saying in recent years, but how logical is it? There are many different aspects to uncertainty, some that can be measured and some that cannot. Uncertainty is an unchangeable condition of existence. As individuals, we can feel more or less uncertain, but that is a distinctly human phenomenon.
You may have read that well-known stock indices in the US and Europe have reached new highs in recent months. Is a new market high an indication that it is time for investors to cash out?
In 2016, the UK market reached new highs and stocks in a majority of developed and emerging market countries delivered positive returns.
Since Britain voted to leave the European Union, the pound has slumped to a five-year low against the euro and a 30-year low against the US dollar. Currencies have historically been volatile and unpredictable, but this unpredictability need not cause concern to investors with global assets.
Did you notice the late Summer surge in people wandering apparently aimlessly and staring at their smartphones? Chances are they were playing Pokémon GO. It’s an activity eerily close to how some people see investing.
Every now and then, unexpected events can take people by surprise. That happened recently with the UK’s EU referendum and it caused a flurry of activity across world markets. Short-term volatility can make investing in shares uncomfortable, but that discomfort comes with the territory and it’s important to keep it in perspective.
Have you ever seen a child standing tentatively at the edge of a swimming pool? She’s torn between her desire to join the gang in the water and her fear of diving in. In committing to the market, investors can be like that.