Iran Events Might Influence the Stock Market

The stock market is influenced by many factors. Some of them include war and political turmoil. The recent events surrounding Iran are about to have an impact on the performance of the stock market, so be prepared.

Even though the United States and the United Nations have warned Iran for its nuclear program no positive effect from these admonitions has been observed.

Since Iran is one of the key producers of oil in the world a potential stop in the supply from Iran may result in significant increases in the prices of oil, which in turn may lead to the stock market hitting the skies.

Predictions have been made that the price per barrel may reach $130. However, if the events continue to escalate and reach their peak point the price may go up even further.

Even though the financial damages will be significant, the market will eventually correct the price.

Such oil price increases have been observed when hurricane Katrina hit the US. So, it is doubtful whether the US people are ready to meet another price hike.

Since the supply of oil may be limited, shortages may occur if the price of oil reaches or even exceeds, as some predict, $130.

The movement from fixed price contracts to open market contracts will be observed if the US refuses to purchase oil form Iran.

As a result of the higher oil prices higher levels of inflation will be observed. In order to curb it the Fed may decide to increase the interest rates so that inflation levels are put in balance.

In order to benefit from the raised interest rates, investors may undertake the transference of their assets to interest-bearing investment solutions. However, if they believe that another alternative is possible, then they should not park their money in such investments.

Piece of Advice

We would recommend the paying attention of the events that are taking place around you. You should observe not only the ones that affect the companies of which you own stocks but also other events that may have influence on the overall performance of the stock market. You should have in mind that some events may have only a temporary effect on the stock market, whereas others can influence it in a profound way. So, you should pay attention to the news and be able to separate what really matters from what is unimportant.

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