The volatile stock market has resulted in a record level of trading in shares by 2022. Certain investors might be seeking to increase their profits as well as others make money by purchasing stocks at lower price. In the last few weeks, the market dramatically fluctuated over the course of a single day in reaction to the imminent conflict in Ukraine. The reason for the recent geopolitical tensions have become so important and why there’s been such a huge fluctuation is that the risk of war is one of the biggest risks of inflation from World War 2.
Current market fears
The complete impact of the sanctions and this conflict on the market remains unclear in this chaotic and destructive 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 important things investors need to know about the stock market in 2022 and how the market is responding to war and conflict:
- The stocks that have dropped include leisure and travel stocks as well as banks’ shares.
- Stocks benefiting from the conflict which is not surprising, include defense stocks like military electronic equipment. Petroleum, petroleum, and oil are soaring due to the rising price of crude oil, due to Russia being among the biggest oil producers worldwide. The price of oil is a major issue because they act as taxes and could affect the growth of the economy. Investors are also investing in gold in 2022. It is generally regarded as a secure commodity in periods of market volatility and uncertain times.
- The cryptocurrency market has been affected. Bitcoin and other crypto prices plummeted on the 24th of February after Russia struck the Ukranian cities Kyiv. Certain crypto investors have claimed that Bitcoin’s low supply creates it as a digital gold, and they have claimed that cryptocurrency should be an investment with a high-risk of security and hedge against rising inflation. But, in actual Bitcoin price has been strongly connected to the stock market in recent weeks.
From a business perspective the majority of geopolitical events are short-lived but sharp and can create opportunities. From a human rights viewpoint, war isn’t an option. From the perspective of finance, there’s plenty of opportunity when the market fluctuates so rapidly.
What happens to the stock market during a time of war?
The recent flare-up in the Middle East has investors asking questions about what might happen to their portfolios if a war breaks …