How To Sign Massachusetts Banking Word

How to industry sign banking massachusetts word later

for a significant period of 2020 investing in stocks required an iron stomach the covert 19 pandemic made the early quarters of the year one of the bearish periods we've ever seen in the last 10 years with unemployment rate skyrocketing and consumption low the world economy was in a downhill this was massively reflected on the stock market which was now hitting lower lows as the year progressed the market sentiment however changed in the last two quarters of the year with new vaccine developments pushing the market to new heights the s p 500 closed the year higher by 16 setting pace for 2021. in between the end of last year and today the stock market has been extremely bullish with stocks like tesla seeing an over a hundred percent rise these enormous gains have raised the question on the possibility of a market bubble those worried about a potential crash are looking for indicators that could set the market for a huge correction in this video we're going to look at the possible predictors about the bullish stock world that could be missing providing the possibility of a bubble so first of all we need to understand what is a stock market bubble in simple economic terms a bubble occurs when a stock market price has significant spikes without any corresponding rise in valuations of the subject companies in other words if the stock price isn't a reflection of the underlying company's rise in production growth or profits then it's a bubble companies whose market capitalization increases but their fundamentals aren't justifiable are in this category a common bubble example used to describe this situation is the dot-com era during this period tech companies valuations went through the roof instigated by the expectations of the internet adoption tech companies that didn't fulfill these expectations came down crumbling what could happen if we're in a stock market bubble so as expected all economic bubbles eventually pop the burst then gets followed by a sharp decline in the corresponding company's values which often get bankrupt the impacts don't stop there as they even spread to unrelated stocks as fear spreads throughout the market this can then even lead to a huge stock market crash as we witnessed in 2008 after the housing bubble such periods are characterized with bearish sentiment as more and more investors lose their money as this happens production companies the majority listed in the stock market start to cut their spending this includes letting go of workers to reduce their expenses and increase their earnings to pay off dividends to their investors bubble burst effects aren't confined in the stock world they spread throughout to the economy as employment surges up so do credits and loan delinquencies this affects the banking industry which is the core for most economies although market bubble effects may not spread to this extent ones that have been built up for a long time have such devastating effects in other words when stock market has a huge correction or even crashes the impacts over poor to the entire rest of the economy so i'm gonna now give you three reasons we could be in a stock market bubble after assessing what a bubble entails and its possible ramifications let's look at what could be showing us signs that we're in one the following technical and fundamental factors could be sufficient to confirm that the stock market could be in a bubble number one is massive speculation in the last few months in every single bubble the speculation always plays a significant role this is when investors take a position speculating the stock market liquidity stability and eventual rise in price if this happens in mass then the market often sees unhealthy pumps to new heights these scenarios create a situation where companies capitalizations are extremely overvalued in relation to their business fundamentals the unhealthy rises are characterized with little to no retractament and massive gains in a short period of time these speculative behaviors have been witnessed in the past few months after the big market dumps of early last year the last month of 2020 and the beginning of this year has seen mass spikes the situation is economically abnormal considering that economies have been growing at a stagnant rate during the pandemic during this period production and services sectors such as the travel industry have been severely hit thus the mass stock market price spikes aren't a clear reflection of their economy this in itself has created doubts among conservative and experienced investors who see the current market as extremely overvalued the case for speculation can also be supported by high-rise retail investors with technologies such as robinhood investing has become less costly and barriers to entries have been removed this has attracted a high number of retail investors to seek out higher returns on their investment these apps can be attributed to the mass gains in tech related companies such as tesla furthermore the usa stimulant and unemployment packages have also contributed to the market rise over the few months with new money in circulation interested american investors had more money on their hands to invest this subsequently fueled the market upwards and a surge in the latter months of 2020. over concentrated gains in huge tech companies such as tesla and facebook is a solid indicator of speculative behaviors with new generation of retail investors attracted to these companies the market has seen a huge sum of money moving that way this has created an unsustainable and healthy market breadth that can sport trouble in the near future the near future could be few months away depending on where the top is as more and more retail investors pour in the market may continue creating new highs until it becomes unsustainable this is what happened in 2008 when more and more ordinary investors bought houses waiting to flip it to a higher buyer according to the greater fall fury the buyers continue to buy until the market reaches the top where there is no greater fall to purchase your asset and then the market drastically comes down to its true value number two is the alarming vix indicator while fundamental and technical analysis can be done by reading the news and deducting chart readings respectively sentimental measurement can be done through a vix indicator it's often seen as the barometer predictor of where the market will be in the future a drastic increase indicates that traders are expecting sharp volatile movements while a drop indicates possible market stability vix indicators are a result of complex mathematical calculations they calculate the predictor by looking at weighted index s p 500 options according to moneyweek.com the vix indicator is realized by looking at the money options and the away from the money options the objective is to look at the estimate sharp price movement of at the money options on the market within the few days to expiration this complex tool can be used by investors to forecast future market situations considering that money options are often used as insurance again volatile market movements its indicators will rise when the market is going down and slump when the stock market is stable or growing well in other words vix movement is intensely proportional to the stock market movements most investors will use this to decide their position and often look to enter when vixx is under 25 in this range and below the market is said to be in the right sentiment what higher than this could spell danger in the near future so what does the vix indicator say about the current market before checking its current reading you must understand that vix attempts to predict the future by analyzing the current market motions the sentiment when people feel and expect an incoming dump or bear market then the vic scores will move upward when the bear market materializes the vix will go even higher and higher just like the beginning of 2020 the vix is swinging and ranging between low and normal scores this means that there is no fear and investors are expecting a bullish year this in itself always spells danger for experienced investors the existence of an extremely bullish sentiment often means that the market is potentially overbought and all retail investors are waiting to sell at the top this is a reflection of 2020 2008 and other years where expected soaring market led to massive losses and expectations were not fulfilled while the vic scores are below 25 the market bullish trend may continue for a while during this period more and more investors may take positions hoping to catch a trend and make significant gains this artificial valuation created from expecting a bull run might come to an end at some point as the market capitalization isn't a true reflection of the faltering economy number three is the high and rising shiller p e ratio calculating p e ratio is a common practice for investors wishing to assess the merit of their investment by looking at a company or market profitability over the past few years from this idea professor robert schiller created the now known schiller pe it's more sophisticated and used than regular pe as it eliminates fluctuations that may occur during different times so how is this ratio calculated it can be calculated by using the s p 500 yearly earnings of the past decade from there the earnings and then adjusted using inflation metrics and tools to reflect today's dollar value the current value readings are then averaged for a period of 10 years from the results the indicator will compare the ratio of the price of s p 500 over the subject period so what is the indicator read today and what does it mean for us according to the full.com study the current schiller p e ratio should sound as an alarm to investors as their research results read looking back to 150 years the schiller pe results for the s p 500 have averaged around 16.78 but it has been a lot higher in the past 25 years in fact the current chiller reading has been hovering between 30 and 35 this is even more than double the average reading of the past 150 years although this can be partially attributed to technological advancement that has made it easier for retail investors to take provisions this ratio is still quite alarming to make it even more worrying the ratio has been over the 30 score only five times four of these times we've seen economic depressions stock market crashes or massive corrections among the two periods in history included in the great depression and the dot-com bubble crash of the late 1990s these periods led to massive crashes that had not been experienced before the other two times have been in the last few years where the stock market experienced huge pullbacks in these periods the market saw 20 and 34 pullbacks in different times the remaining period of the five times when the shiloh pe ratio reached 30 and above as you would expect the odds of favoring a potential stock market crash or a big correction that would wipe out a significant market capitalization of the s p 500. so how do you invest in the midst of a bubble as you already know there isn't a 100 sure strategy to protect your portfolio from massive crashes or pullbacks however there are different ways to protect your position and well from sharp declines among them include putting your money in the right and strong companies founded on sound business principles another way would be to integrate disciplined investing strategies to protect your investment this includes adding a stop losses stop losses are added to instruct your stock broker to sell a stock position if it falls below a certain price however it is important to understand that executing stop losses may be a tricky affair if the bubble popped instantly the above reasons show the possibility of a stock market bubble timing when the bubble might burst is an entirely different thing that even the most experienced investors cannot do the only thing in your control is your strategy and ability to buy strong stocks and hold them even in the midst of a crisis [Music]