Causes of Global Stock Market Volatility and Alternative Investment Vehicles

Causes of Global Stock Market Volatility and Alternative Investment Vehicles

INTRODUCTION

The weight of instability of some global micro and macro-economic factors and issues in the past 12 months has taken its toll on the capriciousness of the stock markets. Over the last twelve months, the global stock markets have been very volatile with the governments and major players doing little to reassure investors’ confidence. The stock market movement has a profound effect on the global economy and livelihood of people with share price collapse bearing potential of causing a widespread disruption of the economy. For example, the crash of the stock market in 1929 played a key role in leading to the great depression of the 1930s. On addition to this, volatility in the stock market affects wealth distribution, investors’ confidence, the value of pension fund, and has a direct and indirect effect on investment and other financial markets such as the bond market. Given the sensitivity of stock market movement to the global economy, this articles endeavours to evaluate the factors that have led to stock market volatility in the last twelve months, how the issues have developed and proposes alternative investment vehicles.

GLOBAL ISSUES THAT HAVE LED TO STOCK MARKET VOLATILITY IN THE

PAST 12 MONTHS

  1. China

The Chinese stock market bubble pooped on 12th June 2015 making the Shanghai Index and A-shares traded on the Shanghai Stock Market to lose about 35% of its value with losses being, even more, dramatic on smaller Shenzhen Composite. Following this slump in the stock market, the Chinese government aggressively instituted various measures to control the crisis such as giving money to the stock brokers to buy shares, ordering ……………………….

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