Over the years, full of debate about whether stocks have reached their peak, it is clear that instability is back.
Tuesday's operations proved this; Japan's Nikkei 225 shares fell by 3.5%, before recovering, began to decrease by 2.1%. The Shanghai Composite Chinese index quickly erased its decline by 1.3% and rose 0.9%, thanks to news that trade talks with the United States have been resumed. And the Hang Seng index rose 0.6% when it dropped by more than 2%. The US futures market index also canceled the previous fall.
While Tuesday's launch was launched by Apple Inc. supplier redistribution, even the technology sector in Australia and New Zealand dropped by at least 1%. Everything is part of a larger model, which moves more often from 1% to 3% in any direction. The 30-day turbulence rate of the Nasdaq 100 Index has tripled in five weeks, reaching its peak since 2011.
Strategies for both sales and purchasing are tailored to the shocks of global stocks that might have been left. The CBOE volatility index, known as VIX, is driven by its largest annual growth since 2007.
Stephen Innes has a mantra: never deny the VIX. "You should never forget that," he says. "This is a major factor in fear. Investors are in big trouble when it moves." The Asia-Pacific operations manager Oanda Corp. in Singapore says volatility is "excellent" while coverage is available.
Here are some market participants' comments on how they incorporate the rebound of instability into their strategies:
Communication is the key
Given the fact that in the new reality there is the possibility of solving individual investors, consultants have a greater need to keep in touch with their clients.
"We are looking for new ways to connect more with our customers, such as podcasts and newsletters, so they get the message as clear as possible," said Chris Weston, Melbourne's Pepperstone Group Ltd. research director. "As volatility increases, the media are reporting more and more emotions to entrepreneurs."
Consider the money, opportunities
Volatility is good for brokers and for money-based companies, but it's likely to be bad news for those who invest only in long positions and funds, said Margaret Yang, market analyst at CMC Markets Singapore.
She has their solution: selling sales opportunities whose market prices exceed the exercise price in an effort to obtain shares at lower prices, with opt-in bonuses as an additional allowance. Or stay aside. "I tend to wait and see the position with somewhat available money, until the conversations are clearer and the dust will be in the technology sector," Yang said.
Raymond Chan, investment director of Allianz Global Investors, expects instability to increase next year, as central bank policy will normalize and capital costs increase. It is therefore important to focus on the prospects for companies rather than on rating. He added that significant examples are in Asia, while expecting an increase in regional stocks in December and an outstanding 2019 year.
Get in the turmoil of time
Fluctuations mean more shopping opportunities for those who can ride hills. "Instability opens up a window to buy funds with an investment horizon of six months to over a year," said Cristina Ulang, research director at First Metro Investment Corp in Manila. "Therefore, the strategy is to accumulate market difficulties, but very selectively and slowly, taking into account quality activities."
Pay attention to
For all who are not very long-term investors, greater fluctuations at the simplest level mean that attention must be paid to events.
"If everything had been euphoric and expensive, as it was in 2006-2007, it would be easy," said Nader Naeimi, AMD Capital Investors Ltd. Dynamic Market Leader in Sydney. "But there are enormous differences that create opportunities. We need to have a symmetrical view of the downside risk compared to the potential upsurge. From here, there is a need for flexibility and dynamism."