The financial markets are a bewildering place to be. At the same time, geopolitical developments across the globe also lead to new developments in deals and financial instruments. So how do you connect it all together ? Like if the US hikes steel tariffs from China, then how would it impact the indices? How do you make sense of all of it ?
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Most of the lithium that is in your electronics batteries comes from Chile. If there is any political trouble in Chile (government collapses, miners go on strike or something similar) then it'll affect the supply chains of companies like Apple, Samsung etc. This means that they may not be able to deliver as many products, not meet quarterly revenue estimates and as a result the market will loose some confidence. Stocks will dip. If enough of these players make up an index (like the S&P 500) it'll dip too.
sounds like you're a student/newbie. my advice to you is to skip the news, read from people with good track records. anyone can make anything sound good, but unless they've actually made money long term, they're worthless. develop a set of principles, find what style works for you, and go from there.
you could say any number of things: hiking steel tariffs just increases input costs for corporations which are heavy users of steel and cause them to pass the cost along to consumers and stoke inflation, so it could be bearish. it also may not affect sectors that are asset-lite like tech, so it's bullish. on the other hand, it introduces uncertainty, hurts consumer confidence, and if we have inflation, that hurts consumer spending which is 2/3 of GDP, so it's bearish. on the other hand, GDP growth and market growth are not correlated at all, consumer confidence numbers and stock market returns are inversely correlated, so it's bullish.
shit like this is what I call "inside baseball" I don't care about most of this shit, there's always stories that can make you change your outlook. just abide by your principles, focus on the psychological aspects of investing, diversify, be a contrarian, and you'll be fine. feel free to ask more questions
Do people change their principles or is it set once you've already established it?
And what do you mean by focusing on the psychological aspects of investing?
Are there anyone that you would recommend to read from?
Thank you!
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