Stock Trading Becomes More Difficult As U.S. Markets Plunge
If you’re into stock trading, chances are that you’re not too happy with what’s going on at the moment. For the last few months, being profitable trading stocks has become more and more difficult. The bottom line is that U.S. markets are plunging and no stock is safe from the declines. But what’s causing the stock market to take the plunge and is there anything that tells us that trading will become more profitable anytime soon? Today, I’ll make an attempt at answering that question.
Why Stock Trading Is Getting Harder And Harder
To make money by trading stocks, investors look for low priced stocks that are likely to climb. The only problem is that there isn’t a stock on the market that’s a sure win at the moment. The decline in the stock market is the result of the Federal Reserve. Sure, some stock analysts will blame the declines on China’s economy; and I can agree that China’s economy is what started the downtrends. However, the problem in the US stock market goes far beyond China. In fact, the problem is actually a home brewed issue.
Since late 2014, the Federal Reserve has been talking about their plans to increase their interest rate. Doing so would cause turmoil in the US stock market because higher interest rates mean that U.S. consumers will have less money to spend on products as they spend more money on interest. However, at this point, the stock market decline isn’t an interest rate concern issue, it has more to do with concerns over the Federal Reserve. As Bloomberg points out, investors don’t know what to do in the market because it seems as though the Federal Reserve doesn’t know what to do. This raises concerns for those in the process of trading stocks. At this points, those who make their money trading are concerned that the economy isn’t strong enough to show gains; thanks to mixed messages sent out by the fed.
Foreign Concerns Are Also An Issue For Those That Make Their Living Trading Stocks
Another concern for stock traders is the fact the the worldwide economic picture isn’t looking very strong. If you follow the stock market, you know that China’s economy, Europe’s economy and several other economies around the world are having a bit of a rough time at the moment. In fact, the Huffington Post reports that China’s economy may be worse than we think. When economic conditions are poor, we tend to see poor activity when trading in the stock market.
Will Stock Trading Become More Profitable Any Time Soon?
Unfortunately, I don’t think that we’re going to see a solid recovery in the U.S. stock market for quite some time. The bottom line is that it took a while for trading to get this rough and it’s going to take a while for the market to recover.
[Image Courtesy of Business Korea]
