Here’s What it’s Needed to Avert any Market Stock Crash

As we come to the end of September it is important, noting that there could be a major setback in the stock market in the world. Investors will continue to incur some huge losses even it had been predicted that equity prices will continue rising. This is because a new from recession is emerging from Japan and Europe and yet not all countries have fully recovered from the slump of 2009. Analyst suggests that it takes a long series of rate hikes distributed over many years to trigger a serious business financial crisis. However, some commentators suggest that stock markets have already reached this serious speculative condition.

According to Peter Lynch a stock market analyst, stock markets have a high potential to be volatile. This is mainly because their fall and rise is usually very complex. It’s important, noting that business finance have recently been adversely affected by world events such as terrorism, war and civil arrest which has also directly affected the stock market. These impacts usually occur in a chain reaction and can either be direct or indirect. For example, after the terrorist attack on 9/11, stock markets were directly affected which later made investors in the US to concentrate more on stocks and bonds with less risk. 

Investors are being urged to be more positive to prevent any market crash. They are also advised to insure against a crash. This is because the recent inflation and interest rates can influence the stock market negatively. In situations where the interest rates are raised the majority of investors sell their higher risk stocks.

The exchange rates should also be monitored to avert any future market crises. Foreign currency rates impact directly on the price of stocks in other countries. Any change in exchange rate will directly or indirectly affect the cost of doing business in the country.

The release of new products in the market can affect the stocks and stock markets. This should also be closely monitored to avert any future crises in the market. George Soros a financial speculator warns that some individuals use the internet to control the price of new products so that they can increase the value of their own profits and shares.

Finally the internal development of big companies should be watched closely so that it cannot affect the price of its stock. Stock market movements are greatly influenced when internal developments such as hiring, firing, the suspension of dividends and fraud are unexpected.