The American stock market just experienced a major price correction but it might not be over. Even though the correction was quick, it made investors worried and now experts are saying there might be more coming.
According to a group of Morgan Stanley strategists based in England, the correction was only a taste of what’s to come soon, possibly even in the second quarter. A note released by the group on Monday describes the recent correction as “an appetizer – not the main course.”
Most investors would agree that increasing inflation has the potential to seriously hurt the stock market, however, a group of Morgan Stanley strategists claim that higher yields, and especially higher bond yields, can have an even worse effect.
In the note, the group included that “It’s when growth softens while inflation is still rising that returns suffer most.” They also added that a strong first quarter could have a positive effect on the market, otherwise, we might see more sell-offs in the second quarter.
Can You Protect Yourself Against a Falling Stock Market?
There is no specific protection that can guarantee that your investments are safe, although there are certain strategies that can help out. Gold has long been considered a “safe” investment during tough market conditions and the commodity is known to thrive during inflation and increasing yields.