Podcast Summary
Leverage LinkedIn for hiring and stay informed on financial markets: Small businesses should utilize LinkedIn for hiring, as it houses passive job seekers. Amidst market volatility, investors must stay informed and calm, seeking advice from experts.
LinkedIn is a valuable resource for small businesses looking to hire professionals. It's where you can find candidates who might not be actively searching for a new job but could be open to the right opportunity. With over 70% of LinkedIn users not visiting other leading job sites in a given month, it's essential to expand your search there. Meanwhile, in the world of finance, markets have experienced significant volatility, with steep declines in global stock markets and the crypto market. This has left many investors feeling bewildered and terrified, especially young ones. The causes include the Federal Reserve raising interest rates to fight inflation, the ongoing impact of the pandemic, and the crypto winter. Amidst this uncertainty, it's crucial for investors to avoid panicking and consider their next moves carefully. Seeking advice from top investment brains, as provided in the Money Clinic podcast, can help. In summary, LinkedIn is a must-use platform for small businesses hiring, and the financial markets are experiencing significant volatility, making it crucial for investors to stay informed and calm.
Geopolitical crisis disrupts supply chains, causing inflation and potential recession: The geopolitical crisis between Russia and Ukraine has disrupted supply chains, leading to inflation and potential recession, causing stock prices to decrease as interest rates rise.
The global economic situation was showing signs of improvement, but the geopolitical crisis between Russia and Ukraine has disrupted supply chains, leading to significant inflation and rising energy and commodity prices. Central banks are now forced to raise interest rates aggressively to combat inflation, which could induce a recession. This uncertainty and potential economic downturn have negatively impacted various asset classes, particularly stocks. The price of a stock or bond is the present value of future cash flows, and as interest rates rise, the discount rate on those future cash flows also rises, causing stock prices to decrease. Essentially, the global economy is facing a challenging period of high inflation, potential recession, and uncertainty, making investing in risky assets difficult.
Global economy faces market downturns across various asset classes: Despite challenges, 'boring' stocks have had relatively easier rides compared to speculative assets like crypto and tech stocks, but all markets have seen declines
The global economy is experiencing market downturns across various asset classes, not just in the US. The most speculative assets, such as crypto and tech stocks, have been hit hardest due to their sensitivity to interest rate changes. European and Asian stock markets, while also experiencing declines, tend to be more conservative and have fared better. Bonds have also seen a sell-off due to uncertainty surrounding future interest rates and inflation. This environment makes it challenging for investors to determine when to re-enter the market. The "boring" stock markets, consisting of companies that make a profit and are less popular among speculative investors, have had relatively easier rides. However, all markets have seen declines.
Crypto Market Volatility and Losses: Rising Interest Rates, Instability, and Lack of Regulation: The crypto market is experiencing significant volatility and losses due to rising interest rates, instability within individual coins and platforms, and a lack of regulation and transparency, leading to potential for large and sudden losses or gains for young investors.
The crypto market has experienced significant volatility and losses due to a combination of factors, including the anticipation of rising US interest rates, instability within individual crypto coins and platforms, and a lack of regulation and transparency. These issues have led to "bank runs" and price instability, with the potential for large and sudden losses or gains. Young investors, who have entered the market during the pandemic, have been particularly affected, with many experiencing losses of around 60-70%. The lack of underlying assets, cash flow, or yield in crypto makes it difficult to price and adds to the uncertainty and risk.
Individuals face financial pressure due to economic downturn and losses in investments: Many people are reevaluating their financial goals due to economic downturn and investment losses, causing concern for their future and long-term plans.
The current economic downturn is causing significant financial pressure for many individuals, leading them to reconsider their financial goals and budgeting. The speaker shares how they've experienced substantial losses in their stocks and shares, as well as in crypto investments, and how these losses have compounded with rising living costs. They express concern about their financial future and the potential impact on long-term plans, such as buying a house. The speaker also mentions the emotional toll of constantly checking investments and regrets the short-term losses, but emphasizes the importance of thinking about the long-term goals. They ask the podcast experts for insights into the current market situation and contributing factors.
Investing during market crises: Differentiate between past and future investments: During market crises, it's important for young investors to distinguish between already invested funds and future investments. Prices and future returns are inversely related, meaning cheaper assets have higher potential returns. Avoid FOMO and panic selling, as market bottoms aren't signaled with a bell.
For young investors during market crises, it's essential to distinguish between the money already invested and future investments. Prices and future returns are inversely related over the long term, meaning cheaper assets have higher potential returns. Additionally, there's no bell signaling the market bottom, so investors must make considered decisions throughout the downturn and avoid the fear of holding on (FOMO) or selling in panic. Ashley, a young investor, faced this dilemma when entering the market during the pandemic. Although it may have felt like a risk at the time, it was an opportune moment due to the market's significant decline. Now, with market uncertainty, Ashley and other young investors might experience FOMO and the fear of holding on (FOMOH), leading to potential hasty decisions. Instead, it's crucial to remain patient and remember the long-term benefits of investing in cheaper assets.
Reconsidering risk management strategies post-2008 crisis: Investing isn't a game, losses can occur. Stay informed, stay cautious, and stay diversified, considering cash and bonds for safety and stability.
The markets have seen unprecedented growth since the 2008 crisis, but investors, both amateur and professional, need to reconsider their risk management strategies. The markets, fueled by central bank interventions, have felt like a game, but the reality is that diversification and balance are crucial. Investing isn't a game, and losses can occur. Cash and bonds, despite their lower returns, offer safety and stability. This market downturn may discourage some investors, but for those starting out, it's an opportunity to buy carefully chosen stocks and bonds at discounted prices. The future of the markets depends on various factors, including economic conditions, geopolitical events, and central bank policies. Stay informed, stay cautious, and stay diversified.
Central banks signaling aggressive interest rate hikes, but inflation beyond their control: Investors should be aware of the risks and have a solid understanding of their investment strategies as central banks' efforts to combat inflation might not be enough and crypto market remains unpredictable
Markets are not just reflecting current economic conditions, but also investors' expectations for the future. Central banks, including the Federal Reserve, have signaled their intention to raise interest rates aggressively to combat inflation. However, inflation is driven by factors beyond central banks' control, such as oil and commodity prices. As a result, even the aggressive plans might need to be toughened, which could be detrimental to stocks. The crypto market, which Ashley has experienced significant losses in, is also unpredictable and risky, with investors unsure if they can get their money out if needed. Moreover, central banks, unlike in the past, cannot be relied upon to save markets during economic downturns due to high inflation rates. Therefore, it's crucial for investors to be aware of the risks and have a solid understanding of their investment strategies.
Learning from mistakes and the importance of flexibility: Understand that mistakes are inevitable in investing and life, embrace flexibility in insurance coverage and other areas, and seek personalized financial advice for optimal recommendations.
Everyone makes mistakes, including in investing, and it's important to learn from them. Flexibility is key, whether it's in your insurance coverage or other areas of life. UnitedHealthcare Insurance Plans offer flexible and budget-friendly coverage options for various needs. And for all your gift-giving occasions, 1800flowers.com provides products made with love and care to help you deliver smiles. The Money Clinic podcast, produced by FD.com, offers general financial discussions but does not constitute individual financial advice. Remember, it's essential to find an independent financial adviser for personalized recommendations. Lastly, be sure to check out UnitedHealthcare Insurance Plans at uhone.com and 1800flowers.com/acast for more information.
