The stock market has its waves of ups and downs. Many factors can affect the market’s direction. Economy, labor market, inflation, unemployment, political, and health news are just a handful of examples that can affect the stock market or individual stocks. Another recent example that everyone probably remembers is the covid lockdown and how the stock market temporarily crashed. As I’m writing this article, McDonald’s came into the spotlight with a potential health matter, e.coli, that hospitalized a number of people and one death. McDonald’s stock dropped approximately 6% in after trading hours. No one is safe and everyone is susceptible to events. 

Think about the various equities you own. From individual stocks to index funds and bonds, any market can fluctuate at any given moment. Let’s run through some scenarios. Let’s take the tobacco industry. Altria and Philip Morris are big companies in this sector and they have been in the news many times involved in health related matters. Imagine if they lost a huge lawsuit or if Congress passed a law that restricted tobacco use even more. That would hurt their business and shy investors away. 

Another example, let’s talk about the oil sector. What if the demand for oil goes down? What if there was a major oil spill? What if there is conflict in countries that produce oil? Companies like Exxon and Chevron could be affected and susceptible to these type of events which are very realistic.  

How about a microchip manufacturing shortage? Microchips enable electronic devices like your car, phone, computer, and more. Shortage of microchips could slow down production, slow down sales, and hurt companies. Does this sound familiar?  

I have shares in McDonald’s. It dropped 6%. Do I panic? Not really. Having seen the market go up and down doesn’t phase me. McDonald’s is a large company with a solid history of success. I anticipate the share price will go down further but they will get through this and bounce right back.  

If you are investing in the stock market, you are investing in companies and hoping those companies will grow, produce a profit, have high earnings, and have positive news. All great for an investment appeal. Be ready to ride the ups and downs waves of volatility. No one is safe because an event is bound to happen that can affect your investments. Everyone is susceptible to events. If you are interested in following my journey and their journey, follow them on Instagram and email subscribe to get alerts of latest posts or follow me on Facebook, Instagram, and Pinterest.