Published On: Mon, Nov 20th, 2017

Experts warn investors about major market risks to come in 2018

Experts warn investors about major market risks to come in 2018

As we are about to finish 2017 we can clearly observe that the current year despite all negativities and pessimistic forecasts has not upset invertors in global markets, on the contrary to expectations. Investors have been able to make money in 2017 mostly thanks to various strategies pursued and now it is time to read signals to predict the reversal of the wind in 2018.

Analysts say “Markets have been taking a little break after a relatively good year with little volatility, investors are more cautious about taking risks and should be more careful about where they put their money and the pace of the markets may slow down next year.

When we look at the current picture we have in hand for the near future, it is not difficult to see multiple risks we could face in 2018. The major ones among these are interest rates to be implemented by FED, issues with Chinese economy and last but not least political unrest in many parts of the world, ME to be in the first place.

This said, we should not forget either that the fluctuations in the developing country markets have been a constant shadow over the investor’s horizon, all along and this fact will need to be taken into consideration as well, in the coming period.

Regarding the policies FED is expected to apply, many authorities such as US investment bank Goldman Sachs believe FED will raise interest rates in 2018. It is a fact such a move from FED is always very likely to cause serious fluctuations in the finance markets.

On the other hand, as China is the largest commodity importer in the world, the reflections of a slow-down or a negative situation in the Chinese economy is always felt in the global commodity markets as well. The reminders of market corrections in August 2015 and January 2016, which exploded in anxiety about an economic slowdown in China, remain fresh in memory of many investors. To provide an example to cause risks for instance some economic data for October in China shows that economic activity has slowed down and that the 10-year bond yield has risen to its highest level since 2014 meaning the possibility for the Bank of China to inject liquidity into the market to calm down the markets has increased.

To recap, as another expert has commented the US seems to be planning to go up in interest rates next month, the Chinese concern, political developments in Venezuela, Zimbabwe and South Africa not to forget the Middle East are clear reminders of the risks that can show up in emerging markets. On account of above findings and opinions it may be best investors to be more cautious about taking risks and careful about where they put their money in the coming period.

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