Analyzing the history of global financial markets experts pay attention to events that can lead to drastic changes in this area. They try to calculate the most likely risks that arise when working with a large amount of cash. Specialists also offer market participants options for getting out of difficult situations with minimal losses. Let us dwell on the most common risks faced by businessmen in financial markets.
The Return of Inflation
Experts believe that the appearance of inflation signs is one of the important risk factors. Investors can insure against this risk by investing in gold, commodities, stocks, bonds and real estate.
Extremely high debt
Experts remind: the level of world debt is steadily growing. In March 2017, it reached $233 trillion. In many countries, such as Canada, France, Hong Kong, South Korea, Switzerland, and Turkey, a record level of private debt in the non-financial sphere was reported. The US public debt has exceeded $20 trillion, and this is not the limit. Investors are afraid of a rapid increase in interest rates. They can protect themselves by investing in precious metals and real estate.
The world market of bonds
In the world bond market for a long time - about 30 years - there is a "bullish" trend, analysts emphasize. Some investors get rid of bonds believing that the market of corporate and government bonds is highly overvalued. Many of them believe that it is better to buy shares and get rid of so-called "junk" bonds. This helps investors stay afloat.
Geopolitical risks
According to experts, geopolitical events and conflict situations can lead to serious losses in the global financial market. The surprise factor plays a decisive role here. Most investors try to insure their assets fearing an armed conflict. They invest in cash and precious metals, and also seek to diversify their portfolio.
Excess overcautiousness of regulators
Many large investors are concerned about the unpredictable consequences that have resulted from the actions of central banks of a number of countries. In order to ensure maximum security of their assets, investors have to invest significantly in gold and real estate. Market players believe that this minimizes the negative impact of implementing the programs of most leading regulators.
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