Tony Kim
February 1, 2025 16:23
Explore the latest ideas about economic indicators such as PMI, IPC and VIX, and understand the risks associated with investment in emerging markets.
Global economic indicators, such as the Purchasing Managers Index (PMI), the Consumer Price Index (CPI) and the Volatility Index (VIX) are fundamental in the understanding of market trends and potential risks. These indicators provide information on economic expansions or contractions, inflation rates and market volatility, according to Vaneck.
Understanding of key economic indicators
The PMI, derived from monthly surveys of private sector companies, serves as a vital indicator of economic health. A reading above 50 typically indicates expansion, while below 50 indicates the contraction. Meanwhile, the CPI measures the variation in prices paid by consumers for retail goods, offering an inflation snapshot. Another key indicator, the PCE inflation index, tracks the change in the prices of goods and services bought by US consumers.
In addition, VX, often known as the “fear index”, reflects the expectation of the 30 -day volatility market. It is built using implicit volatilities in the S&P 500 index options and is a critical tool for investors seeking to understand the feeling of the market.
Risks in emerging markets
Investing in international and emerging markets presents unique challenges and risks. Monetary fluctuations, regulatory changes and political instability can significantly affect investments yields. Emerging markets, in particular, are subject to high risks, which include greater volatility, lower negotiation volumes and less liquidity.
In addition, emerging markets often face greater risks of custody and operation, together with less developed legal and accounting systems compared to developed markets. Therefore, it is crucial that investors carefully consider these factors when they participate in such investments.
INVESTMENT AND PRECAUTIONS CONSIDERATIONS
Investing in any market implies inherent risks, including the potential loss of capital. Diversification, although a common strategy does not guarantee profits or protection against loss in decline markets. Investors are advised to thoroughly evaluate their investment strategies and remain aware of the dynamic nature of market conditions.
According to ideas shared by Natalia Gurushina and investment professionals in Vaneck, it is essential to recognize that market projections and forecasts are subject to changes and cannot always reflect real results. Investors must remain attentive and informed to navigate the complexities of global markets effectively.
For more detailed information, visit the Vaneck website.
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