When the market is bullish, securities generally do well regardless of what they are. Utilities? Sure. Oil? Yep. Tech? Buy it all! It’s akin to the old expression of a rising tide raises all ships. Sure, there will always be losers. A company may have an off day from a lukewarm product launch or suffer a recall scandal, but when the bulls run, money flows with a greater tolerance for risk. Losses just seem easier to make up
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Description
When the market is bullish, securities generally do well regardless of what they are. Utilities? Sure. Oil? Yep. Tech? Buy it all! It’s akin to the old expression of a rising tide raises all ships. Sure, there will always be losers. A company may have an off day from a lukewarm product launch or suffer a recall scandal, but when the bulls run, money flows with a greater tolerance for risk. Losses just seem easier to make up
Should the bears wander into the market from their forested home, though, the picture turns less rosy. Sector and industry start to play a larger factor in safer trading. Tech becomes specious unless the company is established. Retail becomes more acutely sensitive to consumer confidence. So where does the investment end up? In what are called safe instruments, most commonly.
This flight to safety occurs when investors get jittery about the short to midterm future prospects in the market. Just what are considered safe instruments? Bonds used to be the top of the list, but interest rates have hurt them lately. You’ll typically see precious metals fare better along with conservative sectors such as utilities, basic necessities (basic housewares & food, healthcare, etc) see a surge in activity. If the market gets too crazy for some folks, they’ll outright convert into cash and wait the storm out.
Are you considering a flight to safety? Join Matt and guest Keith King as they talk about currencies, commodity trading, and flights to safety in trading.
Notes
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