When financial markets teeter, as they have since 2022 began, there is no shortage of speculation about where they are headed. Morgan Stanley warned recently that March would be a brutal month for stocks.
One financial adviser echoed that sentiment, saying that "there will be a lot of volatility in the markets" and "lots of chances to put cash to work at attractive levels".
The collapse of Silicon Valley Bank (SVB) has further fuelled speculation about interest rates, bank stocks and the impact on broader markets.
The problem is, no one has any clue what markets will do in the near term. But nothing grabs investors' attention like a shaky market and an old-fashioned bank run, giving financial firms and the commentariat an opportunity to peddle their products and broaden their fame, mostly by sowing fear of declining markets and looming financial crises. And why not? Once the hysteria fades, no one remembers who said what anyway.
The chatter would be entertaining if it weren't so costly. Too many investors act on the unreliable predictions they hear, often by selling their investments and hiding in cash until the talk dies down, eventually buying back the same investment at a price higher than the one at which they sold it.
This story is from the March 26, 2023 edition of The Straits Times.
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This story is from the March 26, 2023 edition of The Straits Times.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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