It's all Red?

Hey, for the first time the financial guy is going to talk about finances!

The financial world seems to be just dropping and dropping. Little ups one day and big downs for the next few...Everything but real estate has been down this year, and it seems like even real estate is slowing down.

If you aren't someone paying close attention to the markets and the news you might be wondering what is happening and what is driving all of this? And where are we headed next?

I can tell you if I (or anyone) had a definitive answer to where we were headed next, we would all be very rich!

What are the causes?

1. Inflation is only worsening
2. Interest rates are increasing to battle inflation
3. There are still labor and supply shortages
4. War in Ukraine and sanctions against Russia
5. Lockdowns and continuing complications from Covid

I think everyone by now has heard that inflation is raging and at close to all-time highs! Investors worry about high inflation because it affects how much money people have available and decreases purchases. On top of that, the Federal Reserve is increasing interest rates to decrease the rate of inflation. Both of those things are going to make the stock markets decline as expected!

Are supply chains still haven't fully caught up to consumer demands for goods, I think there has been good progress as some prices have decreased in the worst-hit markets even in spite of inflation.

The sanctions against Russia cause a major world supplier to be restricted and that is causing problems around the world! And on top of all that fears/lockdowns from Covid especially in China are still weighing on businesses.

It is really hard to see all this news and come out with a positive outlook in the financial/investment world...

BUT there has been some sentiment that this could be the bottom of the dip...

I have always remembered this common saying from one of my professors "Buying the bottom is like catching a falling knife". You might be at the bottom, but you are likely to get cut.

My thoughts are to air on the side of caution, as markets have been detached from fundamentals trading for a long time and are as volatile as ever!

That doesn't mean writing off the stock market, but it does mean picking carefully! We have seen more people get involved in their own stock-picking than ever before because it is so easy to do now! There is money to be made in the dip.

TLDR: The markets have a bleak outlook, but there are some glimmers of hope out there!