The year 2017 could be quite promising for investors and the assets they tend to speculate on. New research indicates how nearly six in ten investors around the world are more bullish on buying assets than they have been in over two decades. Bullish recommendations are nothing new in the world of investing, but it goes to show the world is very concerned about the next US President taking office.
Bullish Investors Can Cause Big Losses
According to the latest Investors Intelligence survey, just over 60% of investment advisors have been making bullish recommendations for 2017. That is not entirely surprising, considering Donald Trump will be the next US President later this week. His Presidency will have a significant impact on the global financial sector moving forward, that much is certain.
It is positive to learn these investment managers foresee a better future for the financial sector in 2017. It remains a bit unclear if their hopes are justified, though, as we are still in the first three weeks of January. Corporate earnings are expected to rise as much as 10% this year, which seems like quite a bold statement. Then again, the Presidency of Donald Trump could bring something new to the financial system as we know it. Whether that will be good or bad, is anybody’s guess right now.
Interestingly enough, it is not just the investors who display a bullish attitude. Consumers and enterprises share this optimistic outlook for the first time in over a decade. After many years of financial hardship, many people feel it is due time things start to improve financially. At the same time, speculators have to be wary about how this optimism can turn sour rather quickly. Every time there is cause for optimism, there is an even bigger concern over potential risk factors.
Every time investors predict a bullish outlook; people have to keep in mind a lot of bag holders are looking to sell off their existing portfolio of assets.It would not be surprising to see several assets and stocks to plummet in value over the next few weeks when investors cash out on the positive momentum. Moreover, every time a new US President is sworn into office, markets typically fall by at least 5% in the following two weeks.
All markets are indicating a pullback is looming. The only asset class bucking that trend is Bitcoin, as investors seem more determined than ever to venture into the world of cryptocurrency. With reduced margin trading feature as, and Chinese exchanges likely to reintroduce trading fees, volatility will be minimal. Bitcoin is one of the most stable investments right now, yet its potential uptrend should not be overlooked by any means.
Header image courtesy of Shutterstock