Monday, December 4, 2020
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There are risks that anyone can talk about that could hurt most markets
As investors wonder where the stock market will go in the near future, they are also thinking about what might go wrong.
In a new monthly survey, Deutsche Bank told consumers what they thought were “the biggest risks to global financial markets in 2021.” The pay firm has provided a list of options for selecting defendants.
“Interestingly, all vaccine-related concerns are in the top 3, indicating that the consensus is good for 2021. However, a successful vaccine roll-up may come as a surprise,” said Jim Reid, a strategist at De Dee Bank. Did.
Indeed, whether investors are confident or something Expected Happens Really Happens, the smallest uncertainty the final event will be kept in the market at full price.
Conversely, you could also say that investors may be somewhat prepared for the items identified in the chart above to go wrong.
But what about the risks that were not presented here (or were taken into account by <5% who answered the question "none of these")?
Well, those unfamiliar hazards are often classified as a symptom of being so unlikely that they are not worth considering too much.
Unfortunately, it is these very unknown risks that do the most damage when they succeed. Think 2020. Coming this year, few would have even imagined that we would face a global epidemic, which would force large parts of the economy to stagnate. This lack of expectation reduces the risk in the market, and therefore causes the stock market to crash like that.
To be clear, we are not suggesting that investors should start thinking about the potential risks, even though they were potential. If investors were always overly concerned about all the things that could go wrong, risky assets like stocks would never be cheap enough.
However, investors should understand that unforeseen events happen and the stock market crashes once in a while.
The good news is that the stock market has a consistent track record Receiving steep damage reco ing And led to new records. And so, over time investors should not avoid stocks for fear of the next crash, but keep in mind that things can go wrong in the short term and present a buying opportunity.
By Sam Rowe, Managing editor. Follow him SamRo
What to see today
Economy
Earnings
Top News
‘Constructive’ Brexit talks and US vaccine rollout lift stocks [Yahoo Finance UK]
U.S. Agencies hacked into a months-long global cyberspace campaign [AP]
Shipment of the Covid-19 vaccine begins with America’s historic historic effort [AP]
Elliott buys a stake in the public collection [Bloomberg]
Yahoo Finance Highlights
The analysis argues that the U.S. Approximately tr to recover. tr trillion dollar stimulus is needed
Senator Warren: ‘We need massive cancellation of student loans’
Co-owner of LA Dodgers: Epidemic will not harm pro-suffrage values
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