As the stock market really starts ticking
September 25th, 2008Bankrupcies recession risk, a U.S. central bank chief concerned: The stock markets reacted to the bad news shocked the summer. It was the crisis in sight. But the capital markets follow their own laws. Who knows, can avoid serious investment mistakes. Capital provides answers to the ten major issues.
After one is always wiser. Apart from financial crises. Since react bankers, investors and traders always shocked anew. Such as the crisis of the Investment Institute Lehman Brothers, which unerringly to the bankruptcy zusteuerte. Or the rumors to the bankruptcy of U.S. Baufinanzierer Fannie Mae and Freddie Mac, which ultimately only through an intervention of the U.S. government have been rescued. Or as a competitor for the American Indymac deposit protection fund had to step.
The broad fall in the past few weeks proves that the nerves of the stock market are blank. These were the problems have long predicted. So far, the financial sector because of the subprime debacle only about 400 billion U.S. dollars depreciated. Already in April, the International Monetary Fund pointed out that the actual losses expected at 945 billion U.S. dollars lie.
Whether Frankfurt, New York, Dubai or Jakarta: bubbles and crashes are part of the nature of the stock market, at least since the 17th Century than in the Netherlands, prices for tulip bulbs in the height shot. Who in the financial markets to invest, you should know their quirks. There is no single model that the fluctuations in the stock markets can correctly predict.
The capital market is a causal chain of Toll House, an extremely complex system with millions of players, alone in the foreign exchange markets every day for more than three trillion dollars around the globe hunting. Times in this drama plays the real economy the main role, sometimes random, sometimes the math, psychology times. The current uncertainty of the financial players also demonstrated their lack of confidence in their own abilities.
Furthermore: Always behave differently exchanges, as the models require. Strong price jumps occur too frequently to crash spread like wildfire across continents and asset classes. Everywhere, it seems that the tendency to price bubbles and collapses the expectations far surpass.
Therefore, investors with the vagaries of the markets familiar. Who answers to a few basic questions knows, is not automatically rich, but he may protect against nasty surprises.