What should stock investors do next?
They compare the current situation with the economic downturn caused by Lehman Brothers and the economic downturn during the Corona pandemic. The market has seen tremendous growth in the past when it recovers from such difficult situations. Many believe that a similar upheaval will occur in the stock market.
But there is a huge difference between the problems of the past and the current decline. All countries reduced interest rates significantly during the Corona lockdown period. Crude oil prices hit record lows. These turned out to be very positive things for the market. So when the epidemic situation started to change, the market experienced tremendous growth.
But now, on the contrary, interest rates have skyrocketed. Crude oil prices do not seem to be going down. So if there will be extraordinary growth in a short period of time, there is definitely less chance of it. Even in the foreseeable future, interest rates are unlikely to return to past levels. The Russian war also does not seem to be ending.
Japan’s stock market proves that thinking that stock markets always go up over the long term is wrong. In the 1980s, Japan’s Nikkei index, which was at 40,000 points, has not crossed 40,000 points even after 40 years of incessant growth. Investors who have invested in the Japanese stock market for a long period of time have not been able to withdraw their money even after 40 years.