Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
A more aggressive cut to stimulate the economy comes with risk—but there are opportunities for savvy traders to take advantage of. Read the article to learn about smart trading moves you can make to seize the opportunities.
Powell hints at rate cuts ahead
During his speech at the Jackson Hole Economic Symposium, Jerome Powell made it clear that a rate cut is likely on the horizon.
“It’s time for policy to adjust,” Powell stated, adding that “the direction is clear,” but the timing and pace of any cuts will depend on economic data, the outlook, and risks facing the economy.
Jackson Hole Symposium | "The time has come for policy to adjust," says Fed Chair Jerome Powell as he lists the factors on which rate cuts depend
While Powell did not provide a specific rate cut figure, his comments suggested that the Federal Reserve is ready to modify its policy to prevent further economic weakening and to guide the U.S. economy toward a “soft landing.”
How Fed rate cuts impact economic growth and market sentiment
Interest rate cuts can help boost the economy by making borrowing cheaper, but they can affect market sentiment in different ways.
A smaller cut (25 basis points) might be viewed as a careful move that keeps investor confidence steady without causing alarm.
On the other hand, a larger cut (50 basis points) could drive quicker economic growth but might also raise concerns about economic risks. Powell mentioned that a larger cut could be on the table if the job market is in serious trouble, aiming to prevent further cooling of labour conditions.
The Fed’s balancing act involves a few key factors
Cooling inflation trend
Recent data shows that inflation is gradually cooling, which provides the Fed with more flexibility to adjust its monetary policy. After more than a year of keeping interest rates at 5.3%—the highest level in over 20 years—Fed officials are now expressing more confidence about moving toward a rate cut.
As Jerome Powell highlighted, “upside risks to inflation have lessened,” indicating that the central bank is preparing to ease rates in the near future.
Economic indicators
Another crucial element the Fed is monitoring is a range of economic indicators, including GDP growth, employment figures, and consumer spending. While inflation has moderated, the job market is starting to show signs of strain. Unemployment has ticked up slightly, raising concerns about labour market conditions.
Powell emphasised that the Fed’s decision on when and by how much to cut rates will heavily depend on the evolving data and the broader economic outlook, which includes growth prospects and potential risks to financial stability.
Market sentiment
A significant rate cut could stir concern among investors if they interpret it as a sign of underlying economic trouble. However, recent market reactions have been positive, with the S&P 500 approaching record highs and government bond yields falling as investors increasingly anticipate a shift in Fed policy.
While the central bank aims to guide the economy toward a “soft landing,” it must balance its policy adjustments with the need to maintain market confidence.
While markets anticipate potential cuts, investors and traders can still find opportunities for value.
Tech stocks poised for gains
Technology stocks could see a boost if the Fed moves forward with rate cuts, as lower borrowing costs often support growth sectors like tech.
The AUD/USD pair is steady around 0.6640 as the U.S. Dollar loses strength. Traders are now focusing on the upcoming Fed meeting, where rate cuts are expected to increase pressure on the USD.
In contrast, Australia’s strong employment data is providing support for the AUD, signalling that inflation could remain high. This leaves the Reserve Bank of Australia in a tough spot, even as the Fed prepares to ease rates.
How CFD traders can benefit from potential Fed rate cuts
With Jerome Powell hinting at upcoming rate cuts, CFD traders have a prime opportunity. A rate cut could boost tech stocks, making long CFD positions in this sector potentially profitable.
Additionally, as the USD weakens, traders might short USD-based CFDs, such as AUD/USD, to benefit from currency shifts. By staying alert to the Fed’s moves, traders can leverage CFDs for short-term gains on these anticipated market changes.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
As part of our commitment to provide the most reliable service to our clients, there will be MT4 & MT5 server maintenance this weekend.
MT4 & MT5 Maintenance Hours:
14th of September 2024 (Saturday) 10:00 – 14:00 (GMT+3)
Please note that the following aspects might be affected during the maintenance:
1. The price quote and trading management will be temporarily disabled during the maintenance. You will not be able to open new positions, close open positions, or make any adjustments to the trades.
2. There might be a gap between the original price and the price after maintenance. The gaps between Pending Orders, Stop Loss and Take Profit will be filled at the market price once the maintenance is completed. It is suggested that you manage the account properly.
Please refer to the MT4 & MT5 software for the specific maintenance completion and marketing opening time.
Thank you for your patience and understanding about this important initiative.
If you’d like more information, please don’t hesitate to contact [email protected]
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
Is diversification such a bad thing? It only is if you don’t know what you’re doing—especially if you’re a trader of FOMO or FOBI.
This lack of emotional discipline typically shows up in one of two ways:
Fear of Missing Out (FOMO) in the market: For a teenager, FOMO is seeing their friends having fun without them on social media. For an investor, it’s the thought, “I see my neighbour making money on cryptocurrency, so I need to buy cryptocurrency.”
Someone with FOMO tends to follow the crowd. This mindset can lead an investor to measure their success by comparing their returns to others, rather than focusing on the returns needed to achieve their own financial goals
Fear of Being In (FOBI) the market: FOBI is the internal thought, “I know how this story ends—I need to sell my stocks.” Someone with FOBI often listens to news sources that profit from pessimism. While it’s easy to hit the sell button, it’s much harder to know when to get back in.
Do any of them sound like you?
If you’re more risk focused, you might be becoming a bit concerned by rising concentrations in your portfolio.
Ignoring this issue could lead to worry and regret later on.
A simple solution is to maintain a portfolio that is highly diversified across different markets, sectors, and company sizes—from large to small.
Proper diversification can help us all overcome the FOMO (and FOBI) that we might feel.
Diversifying your portfolio is a great way for traders to keep their emotions in check. When you spread your investments across different areas, it helps you avoid the fear of missing out on the next big thing because you’re already covering a lot of ground.
Plus, it also eases the worry about being stuck with a bad trade—if one trade doesn’t go well, it won’t take down your entire portfolio since your money is spread out across different assets.
How can diversification help manage risk and market volatility
Diversification can protect you against losses from a single investment failure or underperformance in one asset class, such as a drop in the stock market or issues with a fund manager.
Say, you’ve decided to start trading, and you know that your investments can rise or fall in value.
Following the adage of “Don’t put all your eggs in one basket”, you buy some stocks in a few companies. As things go well, you decide to mix in some forex trading. Finally, you toss in commodities as the finishing touch.
Now, you’ve got three key ingredients: stocks, forex, and commodities. Each of these can be broken down into smaller pieces—different stocks, various currency pairs, and a mix of commodities like oil and gold. This helps to reduce the risk of a cracked nest egg.
While each investment is distinct, they all come together to create your portfolio—the final cake. Just as every ingredient affects the taste of a cake, each investment impacts the overall success of your portfolio.
Here’s a deeper look at what that means, as well as four tips to help you quickly diversify your portfolio.
Invest in variety of asset classes
For example, just having a house, an investment property doesn’t diversify your investments. If property values drop, you won’t have other types of investments to balance out the loss. To diversify, you could invest in different types of assets like stocks or bonds.
Wondering what asset classes you could tap into to shield yourself from rising prices?
Different markets are affected by different factors, so by investing in various regions, you’re less likely to be hit hard if one market underperforms.
Secondly, it can boost your returns. Since markets don’t all move in sync, investing in different regions lets you take advantage of their varying performances, which can lead to better overall returns.
Spread risk across multiple sectors
If there’s one key lesson we’ve learnt from the Covid-19 pandemic, it’s to spread your investments across various sectors. This approach helps minimise the impact of downturns in any one industry and gives you the chance to benefit from growth in different segments of the economy. So, if you’re mostly invested in one sector like tourism, consider also investing in other sectors such as healthcare, or technology.
Mix undervalued and high-growth stocks
Incorporating both undervalued and high-growth stocks in your portfolio is a smart way to balance stability and potential rewards. Undervalued stocks offer steady returns and lower risk, while high-growth stocks provide the chance for significant gains but come with higher risk. By combining both, you can reduce overall risk while still benefiting from growth opportunities, creating a more balanced investment strategy.
Why should you diversify your portfolio with VT Markets
Diversifying your portfolio is made easy with CFDs (Contracts for Difference) because they allow you to trade a wide range of assets without owning the underlying asset. With CFDs, you can access global markets and trade various asset classes, including stocks, indices, commodities, forex, and cryptocurrencies—all from a single account.
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