With December rapidly approaching, analysts have warned of a possible market downside that could take place in the coming weeks. Investments in the stock market have been volatile this year due to the global pandemic, and the end-of-year season could bring further uncertainty to the equation.
The recent warning comes as sector-wide data suggests that market risk for stocks is higher than it’s been in the past year. In the last three months alone, the S&P 500 has dropped 1.8%, the Nasdaq has lost 2.8%, and the Dow Jones has declined 4.1%. This could indicate a slump that could continue into the last month of 2020.
In addition, bond yields that are currently very low could pose further risks to the market. Low rates make stocks less attractive than bonds, likely leading investors to pull their money out. Furthermore, economic data looks to be slowing down from the third quarter, making the recovery from the pandemic more difficult.
Analysts suggest that investors should be prepared for an expected market decline in December, and plan accordingly. This may include portfolio readjustment or shifting to less risky investments instead. Additionally, investors should be quick to take advantage of short-term gains if any arise.
In the end, December could be a tough month for the stock market. With the pandemic not quite behind us and economic data pointing towards a more difficult recovery, investors should be aware of the risks and plan in advance. Make sure to stay up to date with market trends in order to assess when is the best time to make any moves.
With December rapidly approaching, analysts have warned of a possible market downside that could take place in the coming weeks. Investments in the stock market have been volatile this year due to the global pandemic, and the end-of-year season could bring further uncertainty to the equation.
The recent warning comes as sector-wide data suggests that market risk for stocks is higher than it’s been in the past year. In the last three months alone, the S&P 500 has dropped 1.8%, the Nasdaq has lost 2.8%, and the Dow Jones has declined 4.1%. This could indicate a slump that could continue into the last month of 2020.
In addition, bond yields that are currently very low could pose further risks to the market. Low rates make stocks less attractive than bonds, likely leading investors to pull their money out. Furthermore, economic data looks to be slowing down from the third quarter, making the recovery from the pandemic more difficult.
Analysts suggest that investors should be prepared for an expected market decline in December, and plan accordingly. This may include portfolio readjustment or shifting to less risky investments instead. Additionally, investors should be quick to take advantage of short-term gains if any arise.
In the end, December could be a tough month for the stock market. With the pandemic not quite behind us and economic data pointing towards a more difficult recovery, investors should be aware of the risks and plan in advance. Make sure to stay up to date with market trends in order to assess when is the best time to make any moves.
