Unprecedented ETF Patterns Highlight a Volatile Start to the Stock Market
The first quarter of 2021 saw wild trends in the stock market, and ETFs were no exception. Exchange-traded funds (ETFs) have become a reliable barometer for investor sentiment, as the $7 trillion ETF business has grown rapidly over recent years.
As markets began to climb in January following news of potential coronavirus vaccines and economic stimulus packages, investors responded by pouring money into riskier assets, such as stocks. This drove up demand for equity-based ETFs, which track broad indices or individual sectors, such as technology or healthcare.
However, when fears about rising inflation caused a sharp selloff at the end of February, investors shifted their focus away from equities towards bonds and gold-backed funds instead – leading to an increase in fixed income and commodity-based ETF inflows during March.
Overall, this created an unpredictable environment where certain asset classes experienced rapid swings between gains and losses within short periods; making it difficult for even seasoned traders to make accurate predictions on future movements without careful analysis beforehand.
Despite these challenges however, there is still plenty of opportunity available if you are willing to take calculated risks with your investments; so long as you remain mindful that any decisions made should be backed up by thorough research before being put into action…Read more at CNBC