The Dwindling Stock Market And Soaring Penny Stock Trading Opportunities: The Worst Week Of The Year
It is been a wild and crazy couple of weeks on the international stock markets. Is the recent slide grinding to a halt or just taking a breather before tumbling some more? And more importantly, what does it mean to clever penny stock investors?
Wall Street just recently stumbled to its worst week of the season, and global stock markets fell dramatically on concerns about rising interest levels and slowing growth. Immediately after rising almost 9% in the first four months of the year, the Dow Jones industrial average has fallen about 6% from a six-year high.
Stocks have been ailing for the reason that penny stock investors fear the Fed could be so concentrated on inflation that it disregards signs of an economic slowdown, raises interest rates excessively and sends the economy into a recession.
Global stock markets had been sent reeling last week after golden-tongued Federal Reserve Chairman, Ben Bernanke shocked penny stock investors in saying the Fed will continue raising interest rates to keep inflation in check.
And that selection will have a direct influence on the penny stock market. Greater interest rates hurt penny stock prices mainly because investors think it will curb economic development and corporate profits.
But why is inflation heating up? Higher energy costs. Traders and penny stock investors are also nervous that with the hurricane season basically under way, Gulf Coast refineries and oil production websites could be damaged once again this summer and fall.
And greater interest rates have the ability to affect the entire economy. Finance charges on credit cards will rise. So too will interest rates on home mortgages and home equity loans, putting extra pressure on home buyers and a softening housing marketplace. Ultimately, it's going to cost more to borrow for expansion.
But does this signal doom-and-gloom for the penny stock market? While the temptation to sell every little thing is often overwhelming, some see this as a terrific opportunity. "I would not be selling. I'd often be buying," said one New York analyst.
So how exactly is this an opportunity for a money raise? It just so happens that lots of businesses caught within the market's downward spiral are cheaper than they were a number of weeks ago.
And as any professional penny stock investor will tell you, buying an excellent penny stock when it's been beaten down isn't a bad way to make funds and boost business capital over the long haul.
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