Jun
20
Stock exchanges aren’t the best when it comes to 100% stability. You may think that only stock exchanges from developing countries are the ones that face a lot of challenges. That’s not true. Even the most developed stock exchanges in the world experience fall and market volatility from time to time. This is probably why Nikita Mishin sells off stake, knowing that it will soon fall in value. But what really makes stock exchanges fall, and how can you navigate market volatility?
In this article, we’ll explore some of the reasons why stock exchanges fall and provide tips on how to navigate market volatility.
Economic Downturns
Economic downturns are like unwelcome guests crashing the stock market party. They can be triggered by various factors, such as a slowdown in consumer spending or declining business investments. When the economy takes a hit, companies may struggle to generate profits, leading to decreased stock prices. Investors panic when they see their portfolios shrinking amidst economic uncertainties. Fear and uncertainty grip the market, causing rapid sell-offs and downward spirals. It becomes a survival game of the fittest as investors scramble to protect their assets and minimize losses. However, markets have historically shown resilience and bounced back after facing challenges.
Interest Rate Hikes
When central banks increase interest rates, borrowing money gets crazy expensive for businesses and consumers. This can lead to reduced spending, lower corporate profits, and ultimately a decline in stock prices. Investors closely monitor interest rate decisions as they affect the …