Why are my stocks falling?

When a company's financial health deteriorates, its stock value tends to suffer. Investors, who are always on the lookout for opportunities to maximize their returns, may start to lose confidence in the company's ability to weather the economic storm. As a result, they may choose to sell their shares, further pressuring the stock price.

The sell-off of equities by investors is often a self-perpetuating cycle. As more investors pull out of the market, the demand for stocks decreases, leading to a further decline in prices. This decline, in turn, attracts even more investors to seek safer havens for their investments.

In times of economic downturn or recession, a significant shift occurs in the financial landscape. Consumer spending, which is a crucial driver of economic growth, experiences a notable decrease. This reduction in spending stems from various factors such as heightened uncertainty and a decrease in disposable income.

As consumer spending dwindles, businesses feel the pinch. With reduced demand for their products and services, businesses are forced to slow down their investment activities. This slowdown in investments can have far-reaching implications for the overall economy.

In such scenarios, investors often turn to assets perceived as safer, such as gold, bonds, or even cryptocurrencies. Cryptocurrencies, in particular, have gained popularity among investors seeking to diversify their portfolios and hedge against potential economic uncertainties.