The volatile stock market has resulted in a record level of trading in shares by 2022. Investors may be looking to gain a profit and others are gaining by purchasing stocks at lower costs. In the last few weeks, the market been wildly volatile in almost daily reaction to the imminent conflict between the two countries of Ukraine. The reason that the recent geopolitical tensions have become so important and why we’re experiencing such fluctuation is that the risk of war is one of the biggest risk of inflation ever from World War 2.
Current market fears
The complete impact of the sanctions as well as market disruptions resulting from the war remains undiscovered in this chaotic and destructive moment. We can however use a variety of techniques to determine 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 should be aware of 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 stock and banks’ shares.
- Stocks that benefit from the war, which is not surprising, include defense stocks like military electronics. Petroleum, oil and gas are rising because of the increasing cost 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 influence the growth of the economy. Investors have also been dumping their money into gold by 2022. Gold is often regarded as a secure commodity in times of market volatility as well as uncertain times.
- The cryptocurrency market has been affected. Bitcoin and other crypto prices plummeted on February 24, after Russia was able to take over Ukranian cities Kyiv. A few crypto investors have stated that Bitcoin’s low supply creates it as a digital gold, and they have claimed that crypto is 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 perspective of the market from a market perspective, the majority of geopolitical developments are a bit sporadic, but they last a while and can create opportunities. From a human viewpoint, war isn’t an ideal thing. From an economic perspective, there is plenty of opportunity when the market is so volatile.
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