The war between Russia and Ukraine is escalating with no hope in sight. In such a scenario, investing in the stock market might feel risky to some investors, while others might consider this an investment opportunity. Our March stock market forecast tries to answer the question of whether you should invest this month.
Energy
Supplies Matter More
As the oil
prices are soaring due to the Russia-Ukraine
war, every investor needs to consider global energy supplies into account
while they invest. Some might even invest in oil stocks as oil prices of more
than USD 90 will bring free cash flow and several other benefits for these
companies.
Changing
Outlook
Many stock
market forecasters are changing their outlook for other reasons than the
ongoing war. A big issue is that the Democrats' spending bill was canceled, and
they need to redraft it completely and reintroduce it after a few months. The
supply chain issues caused by COVID-19 and restrictions are easing, but global
shipping is not completely free of COVID-19 woes.
Forecasts
for the S&P
According
to a forecast by Bank of America, the S&P will be flat next year and might
rise only to 4600. However, it has already hit a record of 4799.
Goldman
Sachs has predicted that the S&P 500 will rise to the level of 5100 By the
end of this year. Similarly, Goldman Sachs is printing that S&P gain might
be 5050. Morgan Stanley has predicted that S&P might drop from 4500 to 4400
over the next 12 months.
The Rays
of Hope
Another
hope that might boost investors during these tough times is that the Omicron
threat is reducing. Omicron might pass by spring, and if it does, it would be a
great boost for the global economy.
Even the
housing market forecast is brighter as the pace is expected to be faster than
before. More construction is also expected. Some experts are bullish on housing
construction stocks.
As people
have lots of cash, holiday spending has hit new highs. When the COVID threat
goes away, the pace of spending, employment and production is expected to rise.
Supply
chain issues are also going away with time, and the administration of booster
shots will make a return to work easier for everyone.
Should You
Expect a Stock Market Crash?
If we have
a realistic outlook, a stock market crash is highly unlikely currently. Still,
it is wise to pick stocks that can survive a crash. Also, if a crash happens,
you should be prepared for it. You can hedge a crash by smartly managing your
401K, RRSP, or IRAs.
Investing
Strategy for March 2022
There is no
simple answer to should you invest this month. But if you are inclined to buy
shares or invest in stock markets, you can pick up stocks after the prices
decline further. Pick international stocks because foreign markets might
outperform the US market this year. You should also find some deals on the stock
with a market capitalization of USD 50 billion or less. If you do that,
remember that they are meant for long-term holdings.
Another
smart strategy could be doing nothing and letting the insert entities pass the
time. Also, avoid panic selling
as much as you can. It will ensure that you have good long-term returns. Happy
investing!
Sources:
https://www.forbes.com/advisor/investing/stock-market-outlook-and-forecast/
https://www.nasdaq.com/articles/top-stock-market-news-for-today-march-2-2022
https://gordcollins.com/stock-market/factors-forecasts/