Global Markets Investing: An Overview
While October is a month noted for infamous stock market falls, September was already difficult for equities. The tendency for significant market declines in October has been referred to as “Octoberphobia.” Market crises may become a self-fulfilling prophecy, so remain vigilant and avoid being caught off guard if one occurs.
Although October has a grim history of stock market crashes, history demonstrates that October has generally been a productive month. October on a whole has performed well for the market during the last 21 years, placing third for the S&P 500, DJIA and NASDAQ.
Top 5 Things To Watch This Month While Investing Global Indices
Markets have steadied a little over the last three months, but 2022 may still be a terrible year for investors since both government bonds and stocks have had negative returns so far. Investors are concerned about rising prices, sluggish GDP, and the possibility of a recession brought on by an aggressive Fed. There isn’t much positive news to report, but the fact that investor sentiment is mostly negative offers some consolation that the bad news has already been factored into the markets.
- What Kind Of Recession May The US Experience: Many remain proponents of a soft landing for the US and believe that robust financial conditions in both households and businesses may keep the downturn to a maximum of a light recession. The soundness of household and business balance sheets and the possibility of a genuine spending power recovery are reasons against a severe US recession. But for this result to occur, the Fed must slow down and stop tightening at a level that is just modestly restrictive.
Experts anticipate a downward trend in inflation over the next months, which, combined with indications of slower growth, should enable the Fed to take a break once its target rate is between 4.5% and 5%. Phases of Fed tightening, however, are often tense periods for the markets. The prospect of an even more severe recession and excessive monetary tightening is likely to alarm investors. As a result, equity market lows from mid-June might be rechallenged, and market volatility is expected to remain until inflation is definitely on the decline.
- Consider Inflation Rates: Throughout 2022, inflation has remained persistently high. The Russia-Ukraine war’s high energy prices have played a role in this. Cost pressures brought on by pent-up demand as economies emerged from lockdowns and businesses raced to employ workers to fulfil this need have also contributed to it.
Over the next several months, inflation should decline in developed countries. This calls for oil and natural gas prices to stabilising at present levels to prevent headline inflation. Since they were high in March after the invasion, oil prices have dropped by almost 30%. Moreover, since Europe has been able to fill gas storage to approximately 90% of its capacity in advance of the northern winter, natural gas prices have also decreased and should stay within reasonable bounds.
- Impact Of Energy Costs On European Economies: Natural gas makes up around 25% of the energy supply in Europe. 40% of the gas originated from Russia before the conflict. Before its recent spike to almost €200/MWh, the price of natural gas was averaging approximately €16/megawatt-hour (MWh) in the five years leading up to 2020. This is comparable to an increase in oil prices to $600 per barrel.
A recession is all but inevitable, given the shock in energy prices of this size. By replenishing gas storage tanks, obtaining new sources of supply, delaying the closure of nuclear power facilities, and restarting coal-fired power plants, European governments have attempted to lessen the shock.
- Is Credit Suisse About To Fail?: It appears that the European problem continued despite all the fanfare over the British pound’s fall last month. This week, there have been increasing rumblings of issues at Credit Suisse, one of the biggest investment banks in the world.
According to a story in the London Financial Times, officials at the Swiss bank have been calling significant investors to assuage the mounting anxiety. This completes a steep decline of more than 60% since 2022 began.
The essential worry is that, unlike most market volatility, this cannot simply be attributed to the macroeconomic and political climate. As a result, some experts are debating if Credit Suisse may genuinely be a Lehman Brothers-like event that would rock the financial system in Europe and the whole globe.
- Market Declines And Midterm Elections: September resided up to its reputation as a terrible month for equities, even though October is frequently referred to as a “bear-market killer” and is linked with traditionally high returns, particularly in years when midterm elections are held.
However, October is also known for its historically significant market declines. And as what has traditionally been the most challenging time for equities winds to a close, experts caution investors that weak economic fundamentals might outweigh seasonal tendencies.
The history of October as a turnaround month or “bear killer” may provide some solace. October has seen the end of twelve post-World War II bear markets: in 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1998, 2001, 2002, and 2011. In addition, these years included seven midterm bottoms. So naturally, 2022 is a midterm election year as well, with congressional elections scheduled for November 8.
Global Investing From India
The multitude of investments you may make is one of the keys to making good investments. It’s possible to mix stable assets with some volatile securities for good measure. When it comes to investments, diversity comprises more than simply investing in a variety of different assets; it also includes regional diversification. An ideal place to start is global market investing.
What is the global investment? It is a simple question that has an equally simple response. To diversify your financial portfolio, owning shares or assets of companies based outside your home nation reflects global investing. These investments may serve as a risk and growth buffer for economies other than yours.
You will gain from expanding your stock portfolio via global investing. The thought of international investing should only be advantageous if you have gained sufficient expertise in trading in your own country with the help of Stockal’s expert guidance. Check out the video below for more information:
How To Invest In Global Stocks From India?
- Direct Investment: Some ties exist between brokerages in the United States and stockbrokers based in India. While carrying out your transactions, these brokers would function as intermediaries. If you are wondering how to start global investing from India, then creating an account with Stockal is one such approach.
With Stockal, creating an account is simple and takes just a few minutes. It has a simple user interface and makes money transfers simple. Additionally, they provide fractional investment. For your convenience and advantage, choose an investing app that offers no brokerage, no maintenance fees, and the possibility of a free account setup.
There may be restrictions on the types of investment vehicles you use, the number of transactions you are permitted to execute, or both, depending on the brokerage company you choose. Due to the currency conversion and trading fees involved, the investment expenses may vary (if any).
Therefore, before creating your account, be certain that you are entirely informed of any costs associated with the procedure.
- Indirect Investment: When it comes to investing in global markets, you may use the same indirect investment strategies as domestic investments.
- ETFs: You can purchase Indian exchange-traded funds (ETFs) that monitor and invest in global indices. For example, the Stockal NASDAQ ETF provides user-friendly onboarding, robust security, and timely notifications on potential investment opportunities.
Stock Baskets (or Stacks): One benefit of global markets investing via stacks is that you will have access to specialised companies based on different industries. For example, the Stockal Blue Chip Tech Stack is an investment vehicle that targets just those digital firms that are entirely technological and indispensable to the industry.