Whether it is a newcomer or an experienced investor, the eternal question on the minds of such players remains the same. What is the best time to buy (or sell) stocks?
Early last week, the stock markets rallied when the Fed called an emergency meeting on Monday, which was construed as some what relenting in the face of its earlier hawkish stance.
However, certain things happened simultaneously leading to this rally fizzling out early.
First, a more than expected, U.S. jobs report confirmed market assumptions that the Federal Reserve could implement steep interest rate hikes also. Benchmark U.S. Treasury yields also climbing augmented the view.
Further, the weakening of the Chinese manufacturing activity was followed by rise in Oil prices. The Oil has continued its upward trend after OPEC+ this week agreed to tighten global supply with a deal to cut production targets by 2 million barrels per day. This could further squeeze the supply in an already tight market.
However, the analysts are of the view that markets are offering an opportunity to investors to add on to their portfolios as expectations are that these could bottom out before the year end. Historical actions reveal that markets after such bottoming out, are often followed by powerful rallies.
Although the current market environment suggests to be somewhat defensive, it is not like pulling in the horns completely. There is a famous saying in the stock markets that when people deem it easy to make money here, it gives a jolt.
Whereas amateurs panic, the sharp brains hold their nerve and scout for good stocks at such times. In recent years, the markets gave a chance in 2009, again in 2020 and it might be giving yet another to astute investors. The stock markets still have strong tailwinds.
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