Investing In Today’s Markets

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Table of Contents

Introduction
Main text
Conclusion
Reference

Introduction

Investing in today’s market is increasingly becoming difficult. This is because of the general economic recession that the whole world is facing. The recession has had a direct impact on the stock market. The reason that would make me not invest 100K in the stock market is the current prediction on economic growth. Though we are experiencing an upward trend in the USA, it still cannot be predicted if it will keep moving upwards beyond 2010.

Main text

There are several reasons for this. The fallen house prices hit hard on consumer spending. This has blocked out giving mortgages again to earn extra capital to spend. The falling house prices have removed consumer confidence. The housing business has been the largest form of wealth. Now that it is not doing well, it has caused an adverse financial effect on most households. As we have said that housing business has been the biggest form of wealth, its retardation affects the economy directly.

Mortgage lenders have given up this business because of many defaulters. This has made other financial markets have a negative attitude towards risking. Banks and stock markets have been reluctant to lend when terms are not straightforward.

A recent prediction shows that the trends of state revenue are falling. Chet says that the state general fund revenue is likely to fall by as much as $38 million in the budget year that begins in July (Chet, 2009). This is mainly speaking about a budget deficit in the government. Consequently, the interest on treasury bonds rises to attract investors to buy them. This will force the government to look for extra money to pay out the bonds, straining the economy more. The consequence is that investment and consumer spending has grown much slower. This is an indicator that the economic growth may be on a downward trend.

The escalating rate of unemployment also shows us that we are yet to have some time before being confident of economic growth. The increase in the number of unemployed people has made the government lose much revenue from income tax. This also affects the GDP of the nation. Chet referrers to Terwilliger says that even though the stimulus package will fund the construction package, it will probably not revive the economy quickly. He shows the unemployment rate in South Dakota, which hit 4.4% in January as being a much higher rate than expected. As South Dakota is a key predictor of the economy, we then see that we are not doing well (Chet, 2009).

The government may change its policies on some market products. The House and Senate passed a bill that aimed at banning smoking in Deadwood casinos, bars, and video lottery casinos. The bill, signed by Governor Mike Rounds in September may reduce the revenue of the government which will then have an impact on the economy.

A vicious cycle can be recognized in the case when a state’s economy falls. The impact is directly received by several trust funds which usually give back to the government. The falling economy will result in their inability to give to the government. It predicts that about $20 million usually given to the government will not be given next year. Alongside this, the stock market, which is our focus, has driven their balance to the trust funds suggesting that they will not have money the following year to give to the government (Chet, 2009).

All these are pointers to an ailing economy, and hence a sluggish stock market, which remains unpredictable. Investors think twice before deciding to invest in such a market.

After a careful search and analysis, I found out that if I want to invest, I will have to invest with the Apple PC company. It is paradoxical that amid the global recession, Apple has had a remarkable improvement.

IT products are in high demand all around the world. As the world is becoming more technological, the integration of Information Technology has increased in almost all fields of life. This is an advantage for all computer products. Therefore, one would not be afraid of investing in computer-related companies. Computer products are increasing in importance. This is notable in homes, institutions, hospitals, businesses like supermarkets, and other organizations. Also, they are useful in the military.

Conclusion

Apple Company has an outstanding strategy. This adds to the values that have already been discussed above. It is the way it has penetrated the market. Apple has been sufficiently creative. The company manufactured MacBook notebook machines that are very presentable (Kit, 2009). Their inbuilt batteries have made them earn an excellent reputation in the market. They also cut their prices below their competitors. This was from early this year. As a result, it attracted many customers and significantly improved their sales. The above-mentioned reasons would make me invest with Apple PC Company.

I would still look for alternative ways of investing 100K while watching the general trend of the economy. For exceptional cases, I would choose companies like Apple whose business has grown despite the economic downturn.

Reference

Chet, B. (2009). Economist Predict State Revenues will Fall. Web.

Kit, E. (2009). How Apple Won 91% of the Premium Computer Market. Web.

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Investing In Today’s Markets

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