Global stock indexes are in a state of perpetual evolution. An unstable economic environment has captured the attention of both short-term investors and long term investors over the past year, with the spotlight in last year’s trade war largely on the Chinese trade dispute with the United States. But the ink hasn’t even dried on the phase one trade agreement between these two countries when the market changed drastically with the collapse in oil prices. What is happening now with global stock indexes is nothing less than an evolution.
A simple definition of stock index is the collection of all publicly traded stocks of any industry or company across the globe. These stocks are priced in relation to each other and the world economy as a whole. One of the first major changes to global stock indexes took place on January 5th of this year when the S&P 500 index fell by more than 200 points or about 2% in a single day. Investors worldwide began panicking and scrambling for a safe investment. Global stock index markets have been forced into uncharted waters and the new normal is unknown.
The stock indexes don’t look like they are going to stop changing anytime soon. The S&P 500 index has continued to slide for several weeks and the European index has continued to fall off from the highs it saw earlier this year. It looks like the next big move is going to be in the direction of the Asian market.
Global stock indexes have historically been quite volatile in relation to each other and their country counterparts. The United States stock index has been on a steady decline since the beginning of the year and has started to resemble the situation that was experienced in Japan following the Great Recession of the early 1990s. The American stock market and its political influence has been reduced significantly in many people’s minds. This could have a devastating effect on global stock indexes. But with a few months left in the year, the U.S stock market is still the best performing index in the developed world.
In order to keep up with the volatility of global stock index, you have to keep an eye on the developing trends that affect global stock indexes. You have to be aware of how things have changed since the last week. and what the next move is going to be. It would also help if you follow news reports around the Internet or watch the news networks in order to stay on top of how events in the world markets are progressing around the clock.
The next major change to global stock indexes that we are likely to witness is the implementation of a new system for updating the global index. The Financial Times of London reported that the government of China will introduce a new system of updating the Global Stock Index. There are some who claim this will be a great advancement for the global stock index. Others, however, disagree, but this new system should help the index maintain a more stable and consistent state of affairs.
It seems that with every news report and news story that come out of the Chinese economy, they want to make sure that their currency continues to rise in value. With every news report it looks like a new move is coming down and they are going to take it one step further. So, with every news story coming out, more investors are losing faith in the current system. The more that investors lose faith in the index, the more they will try to get a hold of it, so that they can make up for what they lost the previous week. The index will definitely change and so does your investment.
With the recent developments with global stock index, it seems as though the future for the index is bright. Investors will continue to make money off of the value that is added to the stock index. And the news will continue to change. But it is important that we all remember that the index will always be changing. The future of the index is bright because it has already started to grow. so what are you waiting for, grab the bull by its horns and start investing!