Since the beginning of the year, which began with the fear of inflation, the market has been battered in 2022, and we are now facing it while living in an inflationary environment. Most central banks are now engaging in a reverse currency war by rushing to raise interest rates faster than others. Because of the economy's high inflation, this action was widely anticipated. Fighting inflation by increasing the value of their currency may cause a recession in our economy and lead to stagflation. That is, after all, what most market experts and investors anticipate at this point. As a result, I believe this is a great investment opportunity with excellent timing to enter the market.
The overvalued assets have been corrected and have fallen below their equilibrium price as a result of the painful downward trend since the beginning of the year. There is less risk or tendency to lose invested capital at this level. What could possibly go wrong? Even if you lose, it will be because you chose the wrong level to enter the market from the bottom rather than investing your capital at the top. This is the area where you can place a wager and see if it pays off.
Consider what has brought the market to this point. We were recovering from the COVID19-caused mass prior to the plunge. Since the Fed and the US government were pouring money into the market to save it, inflation was expected, but the market ignored it until the actual number proved there was inflation. As soon as the market saw the number showing inflation, it began to fall. What made matters worse was the war in Ukraine, which slowed the flow of commodities and raised their prices. As a result, the market environment deteriorated and depressing expectations for the future emerged. Since then, the market has suffered. And we know what's causing this downward trend.
And now is the time to ask, "What if these causes are resolved?" What if raising interest rates actually causes inflation to fall? What if the war ended and commodities resumed normal flow? By the time we see that, it will be too late to enter the market and purchase the asset at a bargain price. That is why I want to emphasize that now is the time to go in and grab the assets that everyone dumped because they were afraid of inflation expectations.
Being contrarian is the way to invest.
Can you catch a falling knife?
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