The volatile stock market has caused a surge of share trading by 2022. Certain investors might be seeking to gain a profit and others are gaining through buying shares at discounted price. In the last few weeks, the market been wildly volatile in almost daily reaction to the imminent conflict in Ukraine. The reason that the current geopolitical tensions are vital and the reason there’s been such a huge volatility , is that the possibility of war is one of the greatest risks of inflation from World War 2.
Current market fears
The complete impact of the sanctions and market disruptions resulting from the war remains undiscovered in this tense and destabilizing period. We can however use a variety of methods to understand what the market’s perception is of the signals that are currently being sent out. According to the broker online RoboMarkets.
Here are some information investors need to know about the stock market in 2022 and how the market is responding to wars and conflicts:
- The stocks that have dropped include leisure and travel stocks as well as banks’ shares.
- Stocks that benefit from the conflict not surprisingly, include stocks in defense like military electronics. Petroleum, oil and gas are rising due to the rising price of crude oil, due to Russia being among the largest oil producers around the globe. The price of oil is a major issue because they function as an income tax and affect the growth of the economy. Investors have also been dumping their money into gold in 2022. It is often regarded as a secure commodity in periods of market volatility and uncertain times.
- The cryptocurrency market has been affected. Bitcoin and other crypto prices fell on the 24th of February after Russia struck the Ukranian cities Kyiv. A few crypto investors have stated that the limited supply of Bitcoin creates it as a digital gold, and they have claimed that crypto is an investment that is safe and secure as well as a hedge against rising inflation. But, in actual Bitcoin values have been closely dependent on the price of stocks in recent months.
Bottom line
From a business perspective the majority of geopolitical events are short-lived but sharp and can create opportunities. From a human rights standpoint, war is not an option. But from the perspective of finance, there’s plenty of opportunity when the market fluctuates so rapidly.
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