2011 – Why It Has Been A Challenging Year So Far For Stock Market Investors
The thing about stock market investing is that it is very easy to make money when the overall stock market is heading higher. However when it starts falling you start to see a big difference emerge between the skillful investors and the average investors. Nevertheless it has to be said that 2011 has been a very difficult year so far for a lot of investors in general.
We may only be one quarter of the way through 2011 (at the time of writing) but this looks like it is going to continue to be a challenging year for many stock market investors. The main reason why is because there is one thing that the markets hate and that’s uncertainty.
Unfortunately the whole world is in an uncertain state right now. We have an economic recovery that seems to be going reasonably well, but things could change very quickly with the threat of interest rate rises and the small, but not impossible risk of a double dip recession.
Plus there is of course the wave of global events that are dominating the news right now. For a start we have had the Japanese tsunami which has wreaked havoc on this global superpower, and could have a knock-on effect on other countries around the world that trade with Japan.
We have also seen huge unrest across the middle east and in Libya in particular. This is also weighing heavily on the markets because of the implications that this will have on the oil price and the knock-on effects that this will have on the markets. Furthermore there could be big market moves if the troubles really escalate and it becomes a much bigger global conflict, or maybe spreads to other countries.
The truth is that none of us know where the markets are headed. It could be the case that the global economy continues to bounce back, but the markets still trade sideways because of the other global events that are causing real concern at the moment.
So I guess the point I am trying to make is that you shouldn’t beat yourself up if you are struggling to make money from stock market investing right now. 2011 has been a very difficult year for all of us and the ongoing uncertainty is only likely to continue in my opinion. The markets could well surge higher, maybe as much as 10-15%, but they could easily fall by a similar amount depending on world events. So I think it’s safe to say that 2011 is certainly going to be unpredictable if nothing else.
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