How has the market remained immune to political instability?

A volatile market can be adrenaline pumping and stressful at the same time but that is how the market functions and those well versed in the field know that “this too shall pass.”

Those who watch the market very carefully must have observed that 2017 was a relatively calm and subdued year with no major troughs and peaks. In fact, it is a general observation that the market has been less volatile in the last decade despite some major economic and political upheavals. It makes one wonder what are the factors that dictate the market and is it really immune to political volatility across the globe.What one must understand is that the factors that control the stock market are too complex and cannot be correlated to economic or political situations anywhere in the world.

Unlike people, markets do not react to political instability because that is a bad combination in a business sense.For example, all the furor about Trump becoming President of the United States and how it will influence has the economy has actually done nothing to the stock market per se. There have been no earth-shattering crashes despite the constant sword of uncertainty hanging over the administration with no one knowing who is next in the firing line.

After the two major recessions of the 20th century, the global economy has seen a slow and steady growth which is almost boring. This is probably the best explanation for why the market is ready to withstand any kind of political turmoil anywhere in the world, whether it is the German election or the French polls. As long as the fundamentals remain strong the asset prices will remain less volatile which in turn will not rock the balance as is happening in the present times.

Right now investors are confident enough to venture into even new territories like automated trading systems like the HBSwiss, you can read a HBSwiss review to know more about it, which promise definite and higher returns. The presence of these automated systems has resulted in high-frequency trading where banks and hedge funds are using them to transact automatically. But these systems also have the disadvantage according to some that they lack the human common sense and can accentuate a y decline in prices leading to upheaval in the markets.

So, we see that it is more likely for the market to fall from some of its own practices than from political instability across the globe.