Market Lowest When A Recession Is "Declared"
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Market Lowest When A Recession Is "Declared"
Market Lowest When A Recession Is "Declared"
Since the market is an anticipatory pricing vehicle, whenever overall sentiment tilts strongly toward the view that we are now entering a recessionary period, the pricing discount demanded by the market is often extreme.
This is the explanation of the price declines since the beginning of 2008. While some pundits have argued that the political environment has been a factor, the more meaningful explanation is that overall sentiment -- whether correctly or not -- has shifted to anticipating a coming recession.
From a historical perspective, however, the market has almost always been lowest at this very point: when everyone finally capitulates and begins anticipating a coming recession.
As the economy actually enters the recessionary period, meaning that actual economic data showing negative GDP growth are reported, the market actually tends to rise. Investors start looking for those stocks which will be the leaders out of the recession during this time and begin placing anticipatory bets on the recovery.
This means that the when overall sentiment swings strongly to the "we are in a recession" viewpoint, it usually marks a buying opportunity.
The market is very likely at this point right now.
In: http://www.briefing.com/GeneralContent/ ... OfTheCurve
Since the market is an anticipatory pricing vehicle, whenever overall sentiment tilts strongly toward the view that we are now entering a recessionary period, the pricing discount demanded by the market is often extreme.
This is the explanation of the price declines since the beginning of 2008. While some pundits have argued that the political environment has been a factor, the more meaningful explanation is that overall sentiment -- whether correctly or not -- has shifted to anticipating a coming recession.
From a historical perspective, however, the market has almost always been lowest at this very point: when everyone finally capitulates and begins anticipating a coming recession.
As the economy actually enters the recessionary period, meaning that actual economic data showing negative GDP growth are reported, the market actually tends to rise. Investors start looking for those stocks which will be the leaders out of the recession during this time and begin placing anticipatory bets on the recovery.
This means that the when overall sentiment swings strongly to the "we are in a recession" viewpoint, it usually marks a buying opportunity.
The market is very likely at this point right now.
In: http://www.briefing.com/GeneralContent/ ... OfTheCurve
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