SPONSORED — Whether you have a huge investment portfolio or a simple 401(k), what happens in the market matters to you. That said, in recent years, market volatility has made even the savviest investors leery. After hitting a high in late November of last year, the S&P, DOW and NQCOMPX have all channeled sideways. If you’re an investor of any scale, it’s time to take a good look at what exactly is making the current market so unique.
The shifts are getting violent
If the current market were a made-for-TV love story, there would be no shortage of drama, with moments of highs followed by devastating lows. According to Forbes, the Dow Jones Industrial Average shifted by more than 100 points on 70 percent of the trading days in October 2014 and on 73 percent of the trading days in January 2015.
The market run may be losing steam
Lately, the market has been falling 5 or 6 percent in five or six sessions and then advancing at the same percentage — then falling again in a shorter span of time. This pattern resembles market behavior in late 2007, which was followed by a gradual but steady retreat of 15 percent over the course of a year. History may just be repeating itself today. In 2014, the market was flat for more than nine months; in fact, traders only saw returns during the last 10 weeks of the year.
America’s income is declining
While the economy may be improving after the Great Recession, data shows that American families may not be. According to the Center for American Progress, the median household income in the United States is lower now than it was during the recession. In fact, data shows that middle-class income has been stagnant or declining since 1999, when it hit a peak.
Purchasing power is declining
Despite the bleak household income trends, consumer confidence is now at a seven-year high, according to Kiplinger. However, main street America’s purchasing power continues to diminish, as the cost of household goods steadily rises. Kiplinger reports that consumer prices will rise 1.5 percent in 2015, compared with an increase of 0.8 percent in 2014. Leading the rise is the cost of healthcare, which will increase by 4 percent this year. Fortunately, the recent decline in the price of gas has helped to offset the rising costs of other household necessities.
The value of the dollar is on the rise
According to CNN Money, the value of the American dollar is now at a four-year high. This is significant due to the fact that the dollar has long been recognized as the world’s preferred currency for business. However, with the dollar now stronger and other foreign currencies — like the euro — weakening, investing in the U.S. market is now more expensive for foreigners.
Fear and conflict are everywhere
Events of the last couple years have given national news stations endless fodder for discussion. From the threats and acts of the terrorist group ISIS to the conflict between Russia and Ukraine to widespread panic over Ebola, the market always responds to bad news — and not for the better. Just like you, the market doesn’t like uncertainty and instability.
Time will tell where the market will take us. But if you’re an investor, you can’t take today’s market for granted. Now is the time to pay more attention and educate yourself on the happenings in the marketplace — your savings could depend on it.
What you can do
Luckily you can prepare yourself to navigate the ever worrisome U.S. market. Online Trading Academy teaches a rule-based strategy that takes the emotions out of trading. Let’s face it, we all have the tendency to be driven by fear and greed when it comes to trading in the markets.
Trading involves risk and will also result in losses, but applying the appropriate risk management means that gains are higher than the losses if the rules are followed.
Students receive ongoing support in the form of online learning, live instructor-led trading sessions, accelerated solution programs for alumni, and one-on-one student support. These are just some of the resources students can take advantage of at Online Trading Academy.
Students will become part of a community of traders where the education is ongoing. It doesn’t end when the class ends.
To learn more about Online Trading Academy, or view classes in your area, please visit their website.