Hannu Kemppainen is a business executive and contributor for finance publications. In the following article, Hannu Kemppainen discusses six of the most important stock market trends to utilize in a personal trading portfolio.
There is no doubt that the stock market is a volatile place. It can be difficult to keep up with the latest trends and news affecting the market, particularly if you are an amateur trader or investor who does not have the time or resources to do your own research on these issues.
Fortunately, Hannu Kemppainen explains that there are many sources of information available that can help traders stay up to date on the latest market trends and developments. Below, Hannu Kemppainen explains the top six trends to keep an eye on.
Microcaps
One of the biggest trends in the stock market right now is microcap stocks.
Microcaps are small companies that trade on public markets but have relatively low market capitalizations explains Hannu Kemppainen. These companies tend to be younger and less established than their larger counterparts and often lack both the resources and expertise necessary to avoid frequent price fluctuations.
As such, microcap stocks can be extremely volatile. For this reason, many investors and traders steer clear of these stocks. However, for those with a high-risk tolerance and the knowledge to understand how these companies work, investing in microcaps can be both lucrative and exciting.
Tech Stocks
Hannu Kemppainen says that another important trend in the stock market is the rise of tech stocks. In recent years, many companies in the technology industry have seen unprecedented growth and success, leading to an increased interest in investing in these businesses. Additionally, with new advances like cryptocurrency and artificial intelligence on the horizon, there are plenty of opportunities for investors interested in this sector to get involved.
Of course, with this rise in popularity and profitability comes increased competition. Currently, Hannu Kemppainen explains that there are many tech stocks trading on public markets, and more are likely to come as new companies move into the space.
ETFs
If you are looking for investment opportunities outside of individual stocks or bonds, one option is
exchange-traded funds, or ETFs. Hannu Kemppainen explains that these funds allow investors to buy shares in a variety of different assets at once and often come with lower fees than other fund types.
There are many different ETFs available on public markets, including some focusing on specific sectors, like tech stocks, as well as more broadly diversified funds that contain securities from various industries. ETFs also tend to be less volatile than individual stocks, and as such can be a good choice for investors looking for more stability in their portfolio.
Global Markets
Hannu Kemppainen explains that another important trend that is likely to affect the stock market in years to come is the rise of global markets. With many countries around the world experiencing steady growth or even rapid development, it is becoming increasingly important for investors to follow economic and financial developments outside of their own country.
This is particularly true in emerging markets, where risks are often greater but the potential for high returns is just as large. Additionally, with many international trade agreements being subject to change, investors should keep a close eye on these developments and their impact on global markets.
Interest Rates
Hannu Kemppainen says that one of the most important factors affecting the stock market is interest rates. Given that many investments are subject to borrowing in some way or another, changes in interest rates can have a significant effect on the performance of those investments and stocks in particular.
When interest rates are low, investors often feel comfortable taking on more risk and may choose to invest in stocks rather than bonds or cash deposits. With higher interest rates, however, it becomes less appealing for some investors to increase their exposure to the stock market, leading them instead to stick with safer investments.
Investing in the Future
Finally, Hannu Kemppainen says that another important trend to keep an eye on is investment in future technologies like artificial intelligence and cryptocurrencies. These areas are currently considered high-risk for investors due to their relative newness and lack of a track record. However, with new developments coming out all the time, Hannu Kemppainen says that it is not too far-fetched to expect that some of these investments could eventually end up being hugely successful.
Investors who are able to correctly predict which new technological developments will become mainstream can find themselves with a significant advantage over their peers. However, due to the high-risk nature of these investments, it is often best for investors to spread out their exposure to these areas and only invest a small amount of their portfolio in these assets.
Final Thoughts
Hannu Kemppainen says that there are plenty of trends currently affecting the stock market that investors need to be aware of. By staying on top of developments in different sectors and geographic regions, you can ensure that your exposure to the stock market is as effective as possible.
