26 February 2020 (closed)
USD/IDR (14,018) +52.00 +0.37%
EUR/IDR (15,291) +111.19 +0.73%
Jakarta Composite Index (5,688.92) -98.22 -1.70%
In recent months, positive fundamentals have coloured stock indices green. Despite volatility, these positive fundamentals remain today. Therefore, analysts of JP Morgan emphasize that people should not turn their backs to stock markets now. Risks are obviously always present but the analysts stress that people should not be too concerned about ongoing volatility. In fact, volatility should be used to one's advantage by purchasing when the index is low. Below are five arguments that JP Morgan mentions as reason to keep buying stocks.
• Generally, money keeps flowing to stock indices. The underlying reason being that currently stocks beat any other form of investment in terms of yields so far this year.
• The risk of inflation is minimal.
• Economic data from the USA is promising according to JP Morgan. Rising property prices trigger increased consumer confidence as well as more employment.
• JP Morgan believes that the current low commodity prices are good for worldwide growth.
• The weak performance of the Eurozone members are more stable now. The PMI-index of Europe shows that economic future prospects are currently assessed by European purchasing managers as being more positive than in the last 15 months.