The stock market has been up and down in recent weeks, making April an eventful month. Investors are currently closely monitoring what is happening in the Middle East given the impact of the Iran-Israel conflict on investments.
Dr. Kishore Kulkarni, an economics professor at Metropolitan State University of Denver, said war and other factors have affected people’s portfolios in recent weeks.
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Kulkarni said war tensions were rising following Iran’s attack on Israel. Mid April. He added that attacks in the oil-rich Middle East are impacting global oil supplies, including crude oil, and pushing up energy prices. And that will affect your investments and portfolio.
“The number one reason is war. That’s the number one reason, because war has a direct impact on oil production and uncertainty, which creates problems for the stock market,” Kulkarni said.
The stock market rose on April 11th, but then by April 19th it began to see significant declines.
Kulkarni said another reason for the drop in stocks is that the Federal Reserve has said it doesn’t know when it will cut interest rates. Interest rates will therefore remain high to ensure that inflation falls. This also affects financial markets.
Kulkarni advises investors to be patient and not sell anything when they see their portfolio declining.
“If you’re going to stay in the market for a very long time, don’t do anything because the market always goes down and up, but there’s never been a 15-year period in history where the market went down,” Kulkarni said. .
Kulkarni also discussed why it is important to diversify your portfolio as you never know which sector will be hit at any given time.
“You should buy small and keep buying. Of course you can’t put all your eggs in one basket, so buy some stocks and bonds and buy real estate to diversify your portfolio,” Kulkarni said. You can do that,” he said.
Kulkarni also recommended buying some stocks now if you can, as they are essentially on sale or liquidation.
The good news is that despite ongoing wars overseas, the market has shown some positive signs of recovery over the past week and a half.
“When you see a positive sign that the war is over, the market gets excited about it, so the recovery is very quick. That happened after April 19,” Kulkarni said. “If we stay in a period of peace, economic growth is almost guaranteed, and with economic growth, markets clearly rise.”
