Inflation is decreasing – How investors should act now
Instead of the expected stock market crash expected by many analysts and investors, a strong rebound occurred last week. Above all, Dow Jones, Nasdaq & Co. impressed on Wall Street with gains of well over 5%.
However, I must tell you at this point that the major hurdles for the indexes still lie ahead of us. If these are overcome, new records on Wall Street can still be achieved before the end of the year. But how does all this fit into the otherwise so negative overall context?
Some burdensome factors remain on the table. After all, inflation is still an issue, and there is still talk of possible further interest rate increases.
In addition, the world economy is not in a good state, not to mention the economy here in our own country.
All this, however, is no reason to bury one’s head in the sand. Let’s take a closer look at inflation today, for example, in Germany.
Inflation reaches lowest level since… For the fact is: Inflation here has fallen to its lowest level since the beginning of the war against Ukraine.
According to the first estimates of the Federal Statistical Office, its change fell below the 4% mark for the first time in two years in October of this year.
The chart shows the continuous decline in the inflation rate. (Source: Statista ) Energy prices fall, food remains expensive In October 2023, the decline in previously sharply rising energy prices by 3.2% compared to the same month of the previous year had a dampening effect on the development of consumer prices.
However, the inflation rate for food continued to rise significantly compared to the same month of the previous year at +6.1% in the past month. So it’s still going up in terms of prices in the supermarket.
Due to the generally falling inflation in Europe, the ECB (European Central Bank), as you may have heard, recently announced a pause in interest rates. According to this, the central bank left the key interest rate after ten consecutive interest rate increases at 4.5%.
Look positively into the future Now it’s time to look ahead positively. Because towards 2024 we can expect a further decline in inflation and also a slight decline in interest rates.
In addition, the world economy should start up again and there could also be some relief from the geopolitical front. For example, a meeting between US President Biden and China’s No. 1 Xi Jinping is on the agenda in the coming days. And in the Middle East or the Ukraine it can hardly get any worse.
How you should behave as an investor When it comes to the stock exchange, it should be noted that the present is not traded on the stock exchanges, but the future is anticipated. And here it can actually only get better in terms of the burdensome factors mentioned.
So continue to act wisely and prospectively. Take advantage of the current opportunities to collect numerous stocks at sometimes substantial discounts.
As you know, the profit is in the purchase – it pays to position yourself in time.