The stock market is in the dumps these days. Wall Street and Main Street are both feeling worked over by a financial crisis that’s gripping the entire world. So what’s an investor to do? Well, right now is a great time for investors to take a rational and patient approach to finding bargains before investing. The current stock market is volatile, so you’ll need to adjust your plans accordingly.
If you plan on playing the stock market right now, be prepared to use stop-loss orders and to pay particular attention to any trade you engage in. Worldwide forces are pushing the prices down on many stocks, so if you jump in, make sure you can jump right back out. The best stock market advice anyone can offer in such a climate is to be very careful with any pick you make. You already know not to “fall in love with any stocks.” That’s even more true when so many issued are battered and so many companies could fail.
Some people might advise you to invest in gold, or gold mutual funds, but I think you should consider investing in stocks first. When companies are this beat up, tradition shows that a lot of money can be made if the investors chooses their stocks carefully. You’ve heard the old saying, “Be fearful when others are greedy and greedy when others are fearful.” That has never been more appropriate than right now.
According to a recent report mortgage interest rates in the UK are now back to the same level as they were in the summer of last year just before the onset of the global credit crunch. The research was carried out by Moneyfacts, which claims that the average rate on a two year fixed rate mortgage loan is 6.59%, which is only marginally higher than the rate last summer, which stood at 6.56%.
However, whilst lenders have reduced interest rates over recent months despite there being no change in the base rate industry officials have said that the other costs associated with mortgage borrowing such as arrangement fees and deposit levels remain high. In August of last year the average arrangement fee was £803 but this has now gone up to £964. Things are made more difficult by the lack of competition in the mortgage market, which has resulted from a decrease in the number of mortgage products available.
One spokesperson for Moneyfacts stated: “The pricing is getting back to where we were a year ago, but the appetite for lending is diminished.” The group added that the average amount of deposit required from lenders had shot up, with most people now looking at around a 20% or higher deposit for an affordable mortgage.
A number of lenders have been reducing their interest rates on mortgages as a result of a drop in swap rates, which is the rate at which banks lend to one another. It is widely thought that the base rate will drop before the end of the year, and this could result in further cuts in mortgage interest rates from lenders.