What makes the financial markets so influential?

Real Talk

10 NOVEMBER 2022




In their purpose, financial markets are no different from any other type of market; When we talk about stocks, shares, or asset portfolios, traders’ buying and selling determine the growth of the investment(s).


So, what makes the financial markets so influential, and what is the current state of these markets?


The financial markets are the source of prosperity; Investing generates income, these can increase in value, and enterprises can thrive. 


As with any market, buyers can be cautious, assets are deemed unworthy of support, or a company can collapse. 


Some use the analogy of gambling, but I prefer to think of fresh fruit.  


Before buying, you can check how ripe the fruit is, and you can either eat this now or later. But there may be bruising or a problem inside that you cannot predict, and despite this, grocery sellers will still sell and earn a profit because there is always the possibility of getting a bad apple.


When you throw in a set of circumstances that cause confusion or upset – a global pandemic, global inflation, the prospect of war – traders become more cautious, hesitant, and protective, resulting in the market starting to suffer or fall.


Uncertainty and instability are the kryptonite of the financial markets; Throw in the rising inflation rates, political announcements, and government confusion in our country over the past few months, and people are closing their stalls in the markets, and buyers lose confidence.


The financial markets are currently on a downward path; Mortgage rates (a high-profile aspect of the financial markets) are increasing in accordance with new circumstances, prices are rising around the world, and people feel they have less money to invest.


However, the most important thing to remember is we have been here before. Rather than referring to the 1970s, it is only necessary to look back as far as 2008 to see when the stock market took a major hit.


When will things return to being ‘on the up’? The person who knew and could prove that would be the most revered individual in the world. Until then, we should prepare for a different financial environment. Furthermore, in every situation, there is renewed opportunity and fortune. 


There might be a different stock, perhaps from a different source, but those fruit sellers are still open for business.


The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

Uncertainty and instability are the kryptonite of the financial markets.

10 NOVEMBER 2022




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Real Talk is a series of blogs and articles providing best practices and insightful commentary on financial matters affecting adults of all ages across the UK


SJP Approved – 12/12/2022