What Does -9.5 Mean in Betting?

The line —> has been moving in the opposite direction to the previous one for some time now. Since last October’s elections, the market has been mostly negative, in line with global stock markets. It’s not just about the U.S. trade talks either, as the uncertainty surrounding the outcome of the Brexit negotiations also contributed to this trend. Still, there were some positive signs before the year was out. Gold and some tech-heavy stocks outperformed the market in the final quarter of 2019.

Why Are Stocks Performng So Well?

There are a number of reasons why stocks are doing so well at the moment. First, with the year now in the past, investors can look back at how various market metrics have performed and place where they stand now compared to the beginning of the year. For example, the S&P 500 SPX, -1.71% gained 16% in the last three months of 2019, while the Nasdaq composite index COMP, -3.01% rose 29%. Second, investors have grown accustomed to frequent market swings, so instead of fearing major drawdowns as much as in previous decades, they have come to expect them. Third, a more diverse set of stocks have outperformed in recent months, with small-cap stocks leading the way. Finally, valuations have come down significantly in some cases, meaning that even highly-rated stocks are not too expensive relative to their earnings power. In short, as the economy has slowly been progressing toward a recovery, investors have shifted their capital to where they see more promise.

Will This Trend Continue?

While the U.S. and Chinese economies have slowed, there is no reason why the recent positive trends in equities should come to an end. Indeed, as the coronavirus pandemic began to be contained last summer, people started looking for safe havens. Stocks were seen as a relatively-inexpensive way to play the long-term trend toward a more stable world. Since then, investors have piled in, driving up prices and making it easier for future profits to be generated. A recent poll from Bank of America Merrill Lynch (BAML) and Credit Suisse AG (CS) found that 70% of respondents planned to increase their equity allocation in 2020, with 44% prioritizing the market over bonds, money market funds, or stable-value funds.

How Can I Profitably Place Bets On The Economy?

If you’re looking to enter the market at this point, it is not easy to see how you can make decent returns without putting in a lot of work. However, as the economy stabilizes, you have greater assurance of making money from stock market investment. In fact, as you may know, some of the biggest wins in the market in the last decade have come from people who were able to identify and ride the global economic shifts, earning huge returns along the way.

In a nutshell, the trick is to find high-quality companies with strong moats protecting them from competition. The better the quality of the business and the more sustainable its growth prospects, the greater the chance of generating good profits. Essentially, you want to find stocks that can withstand and thrive in a strong economic environment. A few rules of thumb can help guide your searches for great investment opportunities: