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The Stock Market And Rising Penny Stock Investing Options: The Worst Week Of The Year
It's been a wild and woolly couple of weeks on the international stock markets. But is the recent slide grinding to a halt or just taking a breather before tumbling some a lot more? And moreover, what does it mean to clever penny stock investors?
Wall Street just recently stumbled to its worst week of the year, and global stock markets fell dramatically on concerns about rising interest rates and slowing growth. After rising nearly 9% in the first 4 months of the year, the Dow Jones industrial average fell about 6% from a six-year high.
Stocks have been ailing mainly because penny stock investors fear the Fed could be so concentrated on inflation that it ignores signs of an economic slowdown, raises interest rates too high and sends the economy into a recession.
Global stock markets were sent reeling last week following golden-tongued Federal Reserve Chairman, Ben Bernanke surprised penny stock investors in saying the Fed will keep on raising interest levels to keep inflation in check.
And that selection will have a direct influence on the penny stock market. Higher interest rates hurt penny stock prices simply because investors believe it'll curb economic progress and corporate revenue.
But why is inflation heating up? Higher power costs. Traders and penny stock investors are also nervous that with the hurricane season basically under way, Gulf Coast refineries and oil production sites could be damaged again this summer and fall.
And higher interest rates have the capability to impact the whole economy. Finance charges on charge cards will rise. So too will interest rates on mortgage loans and home equity loans, putting additional pressure on home buyers and a softening housing market. Ultimately, it will cost much more to borrow for expansion.
But does this signal doom-and-gloom for the penny stock industry? When the temptation to sell every little thing might be overwhelming, some see this as a great opportunity. "I would not be selling. I would tend to be buying," said one New York analyst.
So just how is that an opportunity for a money raise? It just so happens that quite a few businesses caught in the market's downward spiral are cheaper than they were a few weeks ago.
And as any seasoned penny stock investor will tell you, purchasing a fantastic penny stock when it is been beaten down is not a bad way to make funds and boost business capital over the long haul.
For more details about stock trading, search: capital pacific.
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