What Is Short Selling?
Those who are brave enough to short stocks and other asset classes garner a lot of bad press, but they serve an invaluable function for markets. How exactly does short selling work, and why would an investor want to do it?
Those who are brave enough to short stocks and other asset classes garner a lot of bad press, but they serve an invaluable function for markets. How exactly does short selling work, and why would an investor want to do it?
The first three quarters for stocks and bonds were collectively the worst since 1931. The Federal Reserve has also made it clear that they don’t want these markets recovering until inflation falls, and it’s hard to fight the Fed. Unsurprisingly, investor sentiment is close to all-time lows. The future appears to be in the hands of central bankers, and it’s little surprise why so much of the world has lost faith in them (if there ever was any to begin with). But long-term investors do best when bears are in charge. Leading indicators also suggest that inflation could slow in the coming months, and with immense political pressure weighing on the Fed, could they pivot?
Textbooks teach us that rising interest rates are bad for the bond market, and this year has confirmed this maxim. So, why would any investor continue to own bonds when interest rates are expected to rise further from here?
Midterm elections are less than three months away, and both political parties are already at war. With so much on the line, what can investors do to mentally prepare for what could become the most contentious election cycle in years?
The first half of the year was one of the worst ever for the stock market, but since mid-June, stocks have reversed course. Was that the bottom for the market, and if so, will it get back to smooth sailing from here?
Recently, the “greenback” has surged higher relative to other major currencies and caught the attention of the media and investors globally. Given the dollar’s role in the global economy, what are the implications for U.S. based investors?