Why You Need a Reliable Stock Market Data API in 2020

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The COVID-19 pandemic has created the greatest economic crisis since the Great Depression. Unsurprisingly, 2020 has so far been a rollercoaster ride for investors in the public equity markets. Despite the higher volatility, it is still as important as ever for individuals to be invested in the public equity markets for their long-term financial health. For that reason it is important for investors to utilize a stock API such as Alpha Vantage. A stock API is an application programming interface that queries data, parses responses, and sends instructions between one software platform and another.

Stocks are critical for an investor’s portfolio because the traditional safe haven of fixed income is likely to significantly underperform in the foreseeable future. In real terms, investors in government fixed income securities are likely to lose money. Propelled by falling interest rates, fixed income has experienced a bull market since the 1980s. The present situation is completely different and we are in a position today where interest rates realistically cannot fall much further. Moreover, most governments today are printing so much money that inflation will exceed positive yields on bonds. Most recently, in response to the COVID-19 pandemic, the Federal Reserve cut rates to essentially zero (0% to 0.25%) from a previous range of 1% – 1.25% and launched $700 billion in quantitative easing.

Recent history tends to invite skepticism on the issue of inflation. Between 2008 and 2013 the Federal Reserve enacted three rounds of quantitative easing (“QE1, QE2, and QE3”). Theses rounds of quantitative easing were expected to create higher inflation which did not materialize, resulting in higher assets prices but only “minimal” inflation in the real economy – or so it seems.

It is important to recognize there has, in fact, been inflation in the economy, but it has not been evenly distributed. Over the past decade consumer goods such as electronics and computer hardware have decreased in price, but the price of goods and services in sectors such as education and healthcare have increased.

There is only one plausible scenario within the realm of possibilities that an investor should still maintain an allocation in fixed income – every other asset class underperforms fixed income and inflation is low or even deflation occurs.

While this is certainly a possible scenario, it is quite unlikely that equities, precious metals, and even alternative assets such as crypto will all have negative returns while only bonds maintain neutral or even positive returns. Given the importance of public equities for one’s investment portfolio, it is important for one to utilize a stock API such as Alpha Vantage. Utilizing such stock APIs will enable investors to stay informed on the markets, engage in analytical research, and monitor the performance of their portfolios over time.

Disclaimer: The content above is distributed for general informational and educational purposes only and is not intended to constitute legal, tax, accounting or investment advice. The information, opinions and views contained herein have not been tailored to the investment objectives of any one individual, are current only as of the date hereof and may be subject to change at any time without prior notice. All investment strategies and investments involve risk of loss.  Nothing contained herein should be construed as investment advice.  Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

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