“The Investor who spots the correct opportunities at the right time and diversifies its portfolio with flexibility on difficult time is the one who will stand to time” Marios Athinodorou.
Investors are sticking to more save heaven assets in their home markets while they may also be looking at the opportunities globally.
While the real risk for the investors is not in the actual volatility of the market but rather the fact that they abandoning there long term positions and goals that allying with their actual life expectations.
The fact that there is a form of panic in the market must not diverse the investors from their goals but rather they must focus on managing their risks of their investments.
They should start preparing themselves because this is a vital moment to distinguish the professional investors from the novice ones.
Professional investors have the long term investment in mind, they are always prepared for extreme volatility and high or low growth stretches of the market.
According on CNBC the global stock markets went down almost as 9 % between January and March.
Based on the above we may start seing bigger rising levels of volatility to a point that its notable to observe that this volatility had seen only three times since the global financial crisis.
According to CNBC companies potentially deliver about 15% growth on earnings globally this year and on long term equity prices probably may also raise in tandem with earnings growth rates.
Now while risks started to show, this may start a kick of the end of the economic cycle but some of the best profits may be made on a later stage of the bull market.
On the other hand many question the negative effects of a potential end of the credit cycle and the rise in inflation.
There are many methods and protocols that investors may follow, for example to diversify their portfolio beyond the normal and traditional investments on equity and bond indices or to
let go the risky appetite of investing on riskier companies that my result more unexpected and unbalanced results, or investors may start researching the assets beyond their home based markets.
Risk is not about short term volatility it is about whether the investor portfolio is in line (blanced) with one’s life goals that may come to fruition after many years.
“The Investor who spots the correct opportunities at the right time and diversifies its portfolio with flexibility on difficult time is the one who will stand to time” Marios Athinodorou.
When an investor assesses the risk of the opportunity he needs to focus more on the dominant trend aligned with long-term trends goals.
An example may be the companies that have high standards of corporate governance face with less risks such as fines or reputational damage.
Currency Market Fundamental view
If we drill down to the short term currency market we can observe that the US Dollar has still some room for growth, its looking particular strong, which may give a major hit on another emerging markets according to expert Simon Derrick on CNBC.
In the short term, I think the dollar probably would get stronger rather than weaker currency," Derrick, who serves as chief currency strategist at BNY Mellon, said on "Squawk Box Europe."
This is without taking in consideration the current global trade tensions, and he warned that if ongoing tariff action undermined the market's faith in America's economy in the long term, it could be "a very different picture."
Following the comments by European Central Bank (ECB) Chief Economist Peter Praet that the bank may shortly debate ending its decade-long program of bond buying by 2018's close
EUR hit a 10-day high against the US Dollar on Wednesday.
Derrick said, that may stop investors for searching yields in the U.S treasury bonds and that may result yields to climb up.
The Benchmark for the U.S. 10-year bond got to 2.994 on Thursday, a nearly two-week high. Yields move inversely to bond prices according to CNBC.
According to Reuters poll conducted over the first week of June more economist are less on the bullish side and 35 out of 60 analyst think that the US Dollar short bullish growth will last another 3 months.
About the Author:
Marios Athinodorou is TeleTrade’s market analyst and commentator. Apart from being an experienced trader, Marios is an advanced technical analyst and is interested in trading psychology. He has 7 years of trading expertise in Forex and CFDs, providing insights to share with all kinds of traders, from beginners to experts.Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars, here.
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