Market outlook: stock market correction, inflation and interest rate concerns – opportunities and risks for investors

Market outlook: stock market correction, inflation and interest rate concerns – opportunities and risks for investors

According to a report from www.cash-online.de, David Wehner, Head of Liquid Assets at Do Investment AG, comments on current developments on the stock exchanges and the effects on the financial industry. He analyzes the reactions of the major central banks to the ongoing concerns about inflation and interest rates and their interpretation by the market. Wehner emphasizes that inflation may not be temporary and interest rates will need to continue to be kept high or even increased. High national debt and a possible debt ceiling drama in the USA could lead to higher risk premiums on bonds and stocks. In addition, rising energy prices and food costs could further drive inflation. Wehner advises investors to position themselves defensively and realize profits in a timely manner. He expects a stock market correction of 10 to 15 percent and sees potential for new buying opportunities, particularly in technology, industrials, Japan and gold. In the months leading up to a US election, there is often a fall rally that drives the market. Investors who took advantage of the summer to take profits could benefit from this rally.