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The Stock Market And Soaring Penny Stock Opportunities: Its Worst Week Of The Year
It's been a wild and woolly couple of weeks on the international stock markets. But is the recent slide grinding to a stop or just taking a breather before tumbling some more? And more to the point, what does it mean to astute penny stock investors?
Wall Street fairly recently stumbled to its worst week of the year, and global stock markets fell dramatically on concerns about rising rates of interest and slowing growth. After rising practically 9% in the first four months of the year, the Dow Jones industrial average has fallen about 6% from a six-year high.
Stocks have been ailing simply because penny stock investors fear the Fed could be so dedicated to inflation that it ignores signs of an economic slowdown, raises interest rates too high and sends the economy into a recession.
Global stock markets were sent reeling last week immediately after golden-tongued Federal Reserve Chairman, Ben Bernanke shocked penny stock investors in saying the Fed will continue raising interest rates to keep inflation in check.
And that decision will have a direct effect on the penny stock market. Higher interest rates hurt penny stock prices since investors believe it's going to curb economic growth and corporate profits.
But why is inflation heating up? Higher energy costs. Traders and penny stock investors are also worried that with the hurricane season basically under way, Gulf Coast refineries and oil production sites could be damaged once more this summer and fall.
And higher interest rates have the capacity to affect the entire economy. Finance charges on credit cards will rise. So too will rates on mortgage loans and home equity loans, putting additional pressure on home buyers and a softening housing market. Ultimately, it will cost a lot more to borrow for expansion.
But does this signal doom-and-gloom for the penny stock market? While the temptation to sell everything may be overwhelming, some see this as a great opportunity. "I would not be selling. I would tend to be purchasing," said one New York analyst.
So how exactly is this an opportunity for a money raise? It just so happens that numerous businesses caught in the market's downward spiral are cheaper than they were a couple of weeks ago.
And as any seasoned penny stock investor will tell you, shopping for a great penny stock when it's been beaten down isn't a bad way to make money and improve business capital over the long haul.
For more details about stock trading, search: capital pacific.
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