World Market Crash: An Opportunity or a Threat?
Since the beginning of the pandemic, the entire world experienced a massive shift in the way people live, but looking into the bigger picture, it’s the world’s economy that really took the substantial hit. The world market consists of the largest markets across the globe, comprised by different stock markets that include the New York Stock Exchange (NYSE) which is also known as the biggest market in the world with $28.19 Trillion market capitalization in 2020), NASDAQ which is well known for having stocks of the fast-growing tech companies like Apple, Amazon, Microsoft, Facebook, and Intel, JPX (Japan Exchange Group), HKEX (Hong Kong Exchanges and Clearing) and all other stock markets all over the world. Alongside with these global market exchanges, investors are usually more interested in the S&P 500, or the Standard and Poor’s 500- this is a stock market index that tracks 500 large companies listed on exchanges in the United States and is also known to be one of the most followed equity indices in the world.
Looking into the performance of S&P 500 since the beginning of the year 2022, it has been experiencing instability and is currently down by around -20%, a clear indicator that the economy is struggling from the current turmoil from various causes, including several pandemic-related fiscal and monetary stimulus, supply shortages (especially on chips and energy), price gouging or overcharging, and the ongoing war between Russia and Ukraine.
If we go through what happened during the Great Recession in 2007–2008, the S&P 500 took a -57% hit from the financial crisis, the international financial system almost collapsed during that time due to several interrelated grounds. If we do not take action now, we may become a victim again of an upcoming immense financial crisis.
Now, as a regular Filipino with various financial and economic data in front of you, not even knowing what some of the above mentioned items are, what should you really do? It’s almost certain that you also feel the massive price increase in different commodities, USD to PHP exchange rate continuously going up creating another ATH (All Time High) in the entire history of the Philippine Economy, unemployment rate still up and some other various negative economic effects still being felt directly by regular citizens without having any cushion in place. Surely, it is hard on your part to adjust, but looking into another perspective- this is also the time to make a fortune.
All of the current economic mayhem being experienced by the Philippines and its citizens today are simply direct effects of what’s happening in the world market as a whole. Unless our government is able to take action in an abrupt and effective manner (which is very unlikely since it takes years of preparation to mitigate such impairment), regular citizens like us cannot escape from the direct effects of these unfortunate events if we do not take action on our own. The Philippine Stocks Exchange Index alone experienced a -50% downfall when the pandemic started in Q4 of 2019- this was the beginning of the nightmare in the Philippine economy, and since February of 2022, PSEI is still down by around -13%.
Given this various information on the current market status, if the world market continues to crash in the years to come, you might also get into deeper financial concern. But if you want to take action now, you can opt to save your funds from PHP to USD in order to lessen the effects of inflation.
Although USDPHP is expected to rest from its current uptrend and take the exhaustion phase to around 54 PHP area, the chart still shows a possible uptrend continuation to 61 pesos per 1 USD in the years to come. Though several factors can hinder this event from happening, it is still advantageous on your end to know the current market status in order to take the right steps in protecting your assets. The downfall of various markets such as the Dow Jones, S&P 500, Cryptocurrency or even in PSEI is a great indicator that you should start learning the basics and advanced skills of trading, may it be in forex, stocks, cryptocurrency or even in other commodities. Taking advantage of these markets during its hard times usually makes a fortune after few years of holding. Similar to Sir Isaac Newton’s law on gravity which states that “what goes up must come down”- there’s also no other way for falling stock prices but to go the other way around.
Should you be interested in learning how to trade in stocks or cryptocurrency, Investratiques is here to help you out in every way possible. Just sign up in the below link and wait for our email for the complete details. Don’t miss your chance to make a fortune, learn how to trade and invest now!
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