Stock Market Crash: The End Game And Down The Rabbit Hole

For a stock market to crash, prices must fall. That is obvious. But what if stocks rise and the value of money falls? Is that a crash? If the value of money drops 30% but the market rises a little, is that a bull market?

Not many people would argue against the premise that it is the Federal Reserve’s liquidity actions that have levitated the U.S. stock market. Sadly, in an attempt to keep the whole economy from imploding it has inflated stock asset values to ridiculous levels. Jay Powell, the Fed Chairman, made it clear in a recent interview that they were committed to supporting the U.S. economy and to protecting it from the effects of anti-Covid measures, for as long as necessary and for as much as needed, and clearly indicated that would be for a long time.

This is the trend of that Federal Reserve support:

The Federal Reserve's total assets
The Federal Reserve’s total assets Credit: Federal Reserve

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(Chart courtesy of the Federal Reserve’s website)

This QE or however you want to brand this liquidity provision (liquidity equals cash, provision equals printing assets that turn into money) is clearly going to run and run for a long time because every time the Fed slackens its swapping of fresh government-backed quality assets for other people’s sketchier assets, down flops the stock market and then up pops more QE to keep the market from crashing Hindenburg-like in flames.

When the Fed tapered in 2019, down went the market and crash went peripheral global economies as U.S. dollars were sucked from the global economic plumbing. The U.S. and the world economy is hooked on the Federal Reserve’s money printing. By swapping golden government debt for other parties’ riskier, perhaps very risky, debt the Fed yanks the world’s dodgy assets holders out of the mire by their hair, thus avoiding a spiral of insolvency. The potential damage of that terrifying comeuppance is what sparks all bailouts, allowing broken companies and economies to stagger on, most likely towards even greater fragility.

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The weird thing is this: If these liquidity operations keep going on, the Federal Reserve will in effect own all its citizens’ homes and all its creditworthy (and not so creditworthy) corporate debt and thus have liens on most of the economic assets of its citizens and producers. It will have in effect nationalized, though probably by accident, the country, having bought it with government paper. 

However, if it brings this process to a halt the market will crash and everyone will instantly be a lot poorer, while if it carries on at some point it will glut the market for its paper, up will go interest rates and down will go the value of bonds and the reality of a much poorer economy will bite.

However, it seems that the Federal Reserve is not going to let the stock market crash whatever the outcome.

But if a dollar in 2023 or 2024 buys significantly less and the market hasn’t rocketed accordingly, you are getting your reset in a chronic way rather than through an acute event of a 30% retrenchment on your portfolio. This will be the aim, once again to smooth the process by spreading it out over a decade or two rather than take the pain in an awful three or so years of restructuring.

Yet make no mistake, the U.S. stock market is a house of cards, and as the Malaysians discovered when they propped up the price of tin, there is a finite nature to keeping a market away from its natural equilibrium and you must spend increasing amounts to do it. At some point you run out of credit and down goes the market to its correct level.

How long the U.S. can continue to debase its credit while maintaining its credibility is the key question in this ongoing drama and every country in its time has gone beyond that point and sunk into crisis. If the U.S. chooses to corner its markets, that time will approach rapidly. With continued QE the system will become more fragile still so to the catalyst needed to breach that fixed market corner will get smaller and smaller until the slightest of nudges will break the spell.

Inflation solves all these problems as it gives the flexibility for economic activity to rebalance as few can keep up with all the different developing prices. It creates impetus for people to get their money moving and crushes debt with negative real interest rates and also stealthily rebalances the actual value of those debts. Switching inflation on and off is a known, even though central banks ludicrously claim otherwise.

But will the stock market crash now? Hearing Jay Powell speak it appears they are prepared to die on the hill of QE. So the market will not be allowed to take its natural course. This means the market will crash but only when and if there is a downfall moment. There has to be a readjustment for a global economy that has lost at least 10% of its output with still more damage to come.

Some governments will aim for a chronic economic development while some will go for an acute one if they can shift its blame onto someone or something else.

As such, investors should pray that the new incoming U.S. administration doesn’t find a neat scapegoat to blame a reset on, to get that out of the way early in their term.

For anyone who is not a diehard buy and holder, the near future must be one where an investor’s fingers should stay hovering near that sell button because the tightrope walk the Fed is walking for the sake of the U.S. and world economy is going to be a precarious one.

Clem Chambers is the CEO of private investors website ADVFN.com and author of 101 Ways to Pick Stock Market Winners and Trading Cryptocurrencies: A Beginner’s Guide.

Chambers won Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Awards in 2018. Follow me on Twitter or LinkedIn. Check out my website.

Clem Chambers

 Clem Chambers

I am the CEO of stocks and investment website ADVFN . As well as running Europe and South America’s leading financial market website I am a prolific financial writer. I wrote a stock column for WIRED – which described me as a ‘Market Maven’ – and am a regular columnist for numerous financial publications around the world. I have written for titles including: Working Money, Active Trader, SFO and Technical Analysis of Stocks & Commodities in the US and have written for pretty much every UK national newspaper. In the last few years I have become a financial thriller writer and have just had my first non-fiction title published: 101 ways to pick stock market winners. Find me here on US Amazon. You’ll also see me regularly on CNBC, CNN, SKY, Business News Network and the BBC giving my take on the markets.

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George Gammon

Stock market crashes and the 👉QUESTION ON YOUR MIND IS 👈..Are we now in the “end game?” This has been the fastest stock market crash, as measured by a 10% decline from a market high, in history. Worst week since 2008 global financial crisis. As we all know, the system now is much more levered and precarious. So what happens now? Does the stock market crash further? Is this the next 2008 style financial crisis? Will this lead to a recession or even a depression?

These are the questions everyone has, and they’re the questions I’ve been asking myself. In this video I’ll do my best to outline the systemic risks in the current system, why the federal reserve doesn’t have as much control as people think, and why this maybe the black swan event people have been expecting. If you’re interested in the future of the economy THIS IS A MUST WATCH VIDEO!

In this stock market crash end game video I’ll discuss the following: 1. The current systemic risks. 2. Jeff Snider’s work showing the Fed isn’t in control. 3. Is this the end game? I give you my opinion and what is the deciding factor for me. Link to Peter Schiff video from clip. Peter is one of my favorites, I’d strongly recommend checking out his channel and podcast! https://youtu.be/NjzYRtK6i_M For more content that’ll help you build wealth and thrive in a world of out of control central banks and big governments check out the videos below! 👇 🔴 Subscribe for more free YouTube tips: https://www.youtube.com/channel/UCpvy… Do you wanna see another video as incredible as this? Watch “Kyle Bass Predicts HSBC Collapse In 2020! (Here’s Why)”: https://youtu.be/QwjiIIht0bw Watch “Repo Market Bailout: TERRIFYING Unintended Consequences Revealed!”: https://youtu.be/-2wJWzoSjRo Watch “2008 GFC: Everything You Know Is Wrong! (Truth Revealed)”: https://youtu.be/Ku58GQ5dcKU#StocksPlummet#MarketChaos#GettingWorse?

Credit Suisse Bullish On Stocks In 2021 Because It’s Bullish On 2022

NEW YORK, NEW YORK – JULY 23: People walk along Broadway as they pass the Wall Street Charging Bull statue on July 23, 2020 in New York City. On Wednesday July 22, the market had its best day in 6 weeks. (Photo by Michael M. Santiago/Getty Images)

Credit Suisse analyst Jonathan Golub introduced his 2021 price target for the S&P 500 (^GSPC) of 4,050, implying 12.2% upside from Tuesday’s closing levels. Underpinning this upbeat call is his assumption that two years from now, the post-virus economic recovery will have already hit a peak.

“Our 2021 forecasts are designed to answer a simple question: what will the future (2022) look like in the future (end of 2021),” Golub said in a new note Wednesday. “From this perspective, we are forced to de-emphasize the near-term, focusing instead on the return to a more normal world.”

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“As we look toward 2022, the virus will be a fading memory, the economy robust, but decelerating, the yield curve steeper and volatility lower, and the rotation into cyclicals largely behind us,” he added.

Based on Golub’s analysis, economic activity as measured by GDP growth will renormalize at levels slightly above trend, or with quarterly annualized growth rates just over 3%, starting in the second half of 2021.

And the labor market — which as of October was still 10 million payrolls short of pre-pandemic levels — will likely reach “full employment” by the second half of 2022, Golub added.

Since the stock market discounts future events, each of these prospects for further improvement down the line should translate into a higher S&P 500 as investors price in these events.

Analysts have already begun to account for an anticipated improvement in corporate profits, as S&P 500 earnings per share (EPS) have on aggregate sharply topped consensus expectations so far for each of second and third quarter results this year.

“We expect 2020 estimates to rise, 2021 to remain stable and 2022 to moderate,” Golub said.

His 2021 S&P 500 price target of 4,050 is based on earnings per share of $168 next year, for an improvement of 20% over the expected aggregate EPS this year. He expects EPS will then rise to $190 in 2022.

Sector leadership

On a sector basis, Golub rates technology stocks as Overweight for 2021, given their “faster sales growth, superior margins, robust FCF [free cash flow], and low leverage. He also rated financials, one of the laggard sectors so far for the year-to-date, as Overweight, given their propensity to lead during recoveries.

“Consistent with a typical recovery, banks should benefit from improving credit conditions, increasing transaction volumes, and a steepening yield curve,” Golub said. “The group is adequately reserved, likely. resulting in a greater return of capital.”

Golub designated cyclicals with a Neutral rating for next year, saying he is “positively inclined toward economically-sensitive groups and believe[s] their momentum should persist over the near-term.” But he added that he thinks the largest quarter-over-quarter improvements in economic activity have already come and gone, leaving more tepid further upside potential for stocks with profits closely tethered to economic growth.

He rated non-cylicals like consumer staples as underweight, while giving health care specifically an Overweight rating.

“Non-cylicals should lag in an improving economy as falling volatility supports higher P/Es (price-earnings multiples) for riskier assets, and rising rates make their high dividend yields less appealing,” he said. “The one exception is health care, which should outperform given a more robust earnings trend.”

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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CNBC Television

Credit Suisse’s Mandy Xu warns that investors are piling into value stocks at their own peril. With CNBC’s Melissa Lee and the Fast Money traders, Guy Adami, Tim Seymour, Karen Finerman and Steve Grasso. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2JdMwO7 » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC#CNBC#CNBC TV

Top Stocks To Buy Today As Markets Pace Towards Worst Week Since March

Markets are set to sink yet again today for the fifth time in six days. If the pace holds up today, this will also be the second consecutive monthly loss for the markets. While volatility is normal pre-election, investors are continuing to grapple with COVID surging to record numbers and resulting in new shutdowns and lockdown measures. Additionally, with zero sign of another stimulus package, fear is certainly rampant about a double dip recession. The Dow dropped 100 points or .38%, while the S&P dropped .41% and the Nasdaq NDAQ -0.8% declined .75%. 

Although yesterday’s news revealed strong economic data regarding US GDP growth and jobless claims, investors largely ignored that today. Apple AAPL -5.6% sharply declined after reporting a 16% decline in iPhone sales and failing to provide guidance for the upcoming quarter. Despite a big beat on revenue, Amazon AMZN -5.4% also declined. Twitter led the declines falling over 15% after reporting user growth that fell short of expectations. For investors looking to make sense of the markets, the deep learning algorithms at Q.ai have crunched the data to give you a set of Top Buys. Our Artificial Intelligence (“AI”) systems assessed each firm on parameters of Technicals, Growth, Low Volatility Momentum, and Quality Value to find the best long plays.

Sign up for the free Forbes AI Investor newsletter here to join an exclusive AI investing community and get premium investing ideas before markets open.

Broadridge Financial Solutions (BR)

Corporate services company Broadridge Financial Solutions BR -0.4% is our first Top Buy of the day. The company, which was founded in 2007, is a spin-off from Automatic Data Processing ADP -0.1%. Our AI systems rated Broadridge C in Technicals, B in Growth, B in Low Volatility Momentum, and B in Quality Value. The stock closed up 1.95% to $138.12 on volume of 560,940 vs its 10-day price average of $141.94 and its 22-day price average of $139.91, and is up 13.2% for the year.

Revenue grew by 1.52% in the last fiscal year and grew by 6.19% over the last three fiscal years, Operating Income grew by 0.88% in the last fiscal year and grew by 5.42% over the last three fiscal years, and EPS grew by 2.0% in the last fiscal year and grew by 13.17% over the last three fiscal years. Revenue was $4529.0M in the last fiscal year compared to $4329.9M three years ago, Operating Income was $624.9M in the last fiscal year compared to $598.0M three years ago, EPS was $3.95 in the last fiscal year compared to $3.56 three years ago, and ROE was 37.39% in the last year compared to 40.79% three years ago. Recommended For You

MORE FROM FORBESBroadridge Financial (BR)

Simple Moving Average of Broadridge Financial Solutions (BR)
Price of Broadridge Financial Solutions compared to its Simple Moving Average YCharts

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Amdocs (DOX)

Amdocs DOX +1.7% is our next Top Buy of the day. A leading software and services provider for communications and media companies, Amdocs is also the largest vendor by revenue in the monetization platforms segment by a wide margin. Our AI systems rated Amdocs C in Technicals, B in Growth, A in Low Volatility Momentum, and B in Quality Value.

The stock closed up 0.84% to $55.42 on volume of 732,226 vs its 10-day price average of $56.85 and its 22-day price average of $57.62, and is down 22.2% for the year. Revenue grew by 1.46% in the last fiscal year and grew by 7.22% over the last three fiscal years, Operating Income grew by 3.9% in the last fiscal year and grew by 14.43% over the last three fiscal years, and EPS grew by 3.5% in the last fiscal year and grew by 21.33% over the last three fiscal years.

Revenue was $4086.67M in the last fiscal year compared to $3867.16M three years ago, Operating Income was $569.75M in the last fiscal year compared to $517.33M three years ago, EPS was $3.47 in the last fiscal year compared to $2.96 three years ago, and ROE was 13.63% in the last year compared to 12.43% three years ago. Forward 12M Revenue is expected to grow by 1.82% over the next 12 months, and the stock is trading with a Forward 12M P/E of 11.82.MORE FROM FORBESAmdocs (DOX)

Simple Moving Average of Amdocs (DOX)
Price of Amdocs compared to its Simple Moving Average YCharts

Fastenal Co (FAST)

Industrial supplies company Fastenal FAST +0.3% is our third Top Buy of the day. Fastenal is the largest fastener distributor in North America. Our AI systems rated Fastenal C in Technicals, B in Growth, A in Low Volatility Momentum, and B in Quality Value. The stock closed up 0.42% to $43.12 on volume of 2,291,171 vs its 10-day price average of $44.02 and its 22-day price average of $44.72, and is up 18.72% for the year. Revenue grew by 4.36% in the last fiscal year and grew by 26.78% over the last three fiscal years, Operating Income grew by 5.57% in the last fiscal year and grew by 26.57% over the last three fiscal years, and EPS grew by 5.82% in the last fiscal year and grew by 46.01% over the last three fiscal years.

Revenue was $5333.7M in the last fiscal year compared to $4390.5M three years ago, Operating Income was $1056.0M in the last fiscal year compared to $880.8M three years ago, EPS was $1.38 in the last fiscal year compared to $1.0 three years ago, and ROE was 31.84% in the last year compared to 28.71% three years ago. Forward 12M Revenue is expected to grow by 0.89% over the next 12 months, and the stock is trading with a Forward 12M P/E of 28.7.MORE FROM FORBESFastenal (FAST)

Simple Moving Average of Fastenal Co (FAST)
Price of Fastenal Co compared to its Simple Moving Average YCharts

Lockheed Martin Corp (LMT)

Major aerospace and defense contractor Lockheed Martin LMT -0.7% is our fourth Top Buy of the day. As of 2014, Lockheed Martin is the world’s largest defense contractor based on revenue, with half of that revenue coming from the US Department of Defense. Our AI systems rated Lockheed Martin B in Technicals, B in Growth, A in Low Volatility Momentum, and A in Quality Value. The stock closed up 0.45% to $352.44 on volume of 1,545,758 vs its 10-day price average of $368.71 and its 22-day price average of $377.48, and is down 10.08% for the year.

Revenue grew by 7.41% in the last fiscal year and grew by 28.59% over the last three fiscal years, Operating Income grew by 11.3% in the last fiscal year and grew by 53.19% over the last three fiscal years, and EPS grew by 5.74% in the last fiscal year and grew by 243.8% over the last three fiscal years. Revenue was $59812.0M in the last fiscal year compared to $49960.0M three years ago, Operating Income was $7698.0M in the last fiscal year compared to $5593.0M three years ago, EPS was $21.95 in the last fiscal year compared to $6.75 three years ago, and ROE was 269.7% in the last year compared to 455.42% three years ago. Forward 12M Revenue is expected to grow by 3.07% over the next 12 months, and the stock is trading with a Forward 12M P/E of 13.68.MORE FROM FORBESLockheed Martin (LMT)

Simple Moving Average of Lockheed Martin Corp (LMT)
Price of Lockheed Martin Corp compared to its Simple Moving Average YCharts

Take-Two Interactive Software (TTWO)

Our final Top Buy of the day is Take-Two Interactive Software TTWO -4.8%. Take-Two is a leading video game publisher most known for owning video game companies Rockstar Games and 2k. Take-Two is best known for video game franchises such as Grand Theft Auto, NBA2k, and Red Dead. Our AI systems rated Take-Two D in Technicals, A in Growth, B in Low Volatility Momentum, and A in Quality Value. The stock closed down 0.99% to $162.77 on volume of 1,257,438 vs its 10-day price average of $165.0 and its 22-day price average of $164.76, and is up 33.33% for the year.

Revenue grew by 9.42% in the last fiscal year and grew by 88.51% over the last three fiscal years, Operating Income grew by 11.69% in the last fiscal year and grew by 213.83% over the last three fiscal years, and EPS grew by 10.07% in the last fiscal year and grew by 153.42% over the last three fiscal years. Revenue was $3088.97M in the last fiscal year compared to $1792.89M three years ago, Operating Income was $425.35M in the last fiscal year compared to $151.38M three years ago, EPS was $3.54 in the last fiscal year compared to $1.54 three years ago, and ROE was 17.66% in the last year compared to 13.92% three years ago. The stock is also trading with a Forward 12M P/E of 46.84.MORE FROM FORBESTake-Two Interactive Software (TTWO)

Simple Moving Average of Take-Two Interactive Software (TTWO)
Price of Take-Two Interactive Software compared to its Simple Moving Average YCharts

Liked what you read? Sign up for our free Forbes AI Investor Newsletter here to get AI driven investing ideas weekly. For a limited time, subscribers can join an exclusive slack group to get these ideas before markets open. Follow me on Twitter or LinkedIn. Check out my website

Source: S&P Global Market Intelligence

By: Q.ai – Investing Reimagined

Q.ai - Investing Reimagined

Q.ai, a Forbes Company, formerly known as Quantalytics and Quantamize, uses advanced forms of quantitative techniques and artificial intelligence to generate investment recommendations across all asset classes. When it comes to money, no one should have to settle. We make investing less intimidating, more accessible and a lot of fun for everyone. That’s investing, reimagined.

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Stock Moe

89.2K subscribers// This is the best penny stocks to buy now 2020 November edition.Join our private community over at Patreon https://www.patreon.com/stockmoe to talk stocks that could grow your portfolio to new levels. I will have exclusive materials as we move forward and my own stock purchases and a brand new high growth portfolio that I am sharing with everyone. If you want to have a one on one person to help you, then this is a must for any serious investor. We just got our private Discord up and running as well. SIGN UP FOR WEBULL: (It’s only a $100 deposit and you get 3 free stocks worth $8 a piece to $1600 from this referral link…I recently signed up…love it and I also get a free stock) https://www.webull.com/activity?invit… Sign up for Robinhood here for a free stock: https://join.robinhood.com/brittnm610 NEW STOCK MOE AMAZON STORE UP AND RUNNING: https://www.amazon.com/shop/stockmoe This is all about getting the best penny stocks to buy now 2020 for November. It is a good time to look at some big penny stocks that are moving and see if there is a way to make a quick profit off of them or if there is a long term play there. There are many penny stocks out there, but most end up at zero eventually . Finding the best penny stocks to buy now is not an easy task. The first of the best penny stocks to buy now is one that I feel has some upward pressure that gives us a chance to make a few dollars. I am not sure how it will go, but this best penny stock opportunity helps us moving forward. It is interesting to see all of this. In looking at the top penny stocks to buy now, there are a few opportunities out there to invest in. The penny stocks 2020 list I made in this video helps to identity these penny stocks. There are a few out there that can work our way, but we need to be careful. These are very volatile and should be handled with care. These are some good penny stocks to watch for 2020 and 2021. These are the best penny stocks to buy now 2020 and not the only ones though. There are a few other opportunities out there for us to consider. These top stocks can go bad very quickly if the market turns south. I still see these as an option for stocks to buy now in my mind. These are great penny stocks for beginners that will get them in with a chance at profit. These are high risk and should be traded knowing that. If you are looking for cheap penny stocks, these best penny stocks to buy now fit the bill. There are many penny stocks to look at and I am sure there are probably many more that could outperform these penny stocks, but it gives you an idea of how I look for a penny stock to invest in. These are the best stocks to buy now and possibly in the future if you are looking for extreme risk and possible massive profits. There is always a chance of losing everything when buying one of the best penny stocks to buy now. These penny stocks 2020 are what I think will have the most action. In summation, the best penny stocks to buy 2020 November edition is all about giving you the opportunity to make massive amounts of money or loss massive amounts of money investing in the top penny stocks to buy now. If you are looking for penny stocks to watch or are investing in penny stocks for the long term, then be aware of the dangers. These can be the best stocks to buy now or the top stocks to buy now if they end up turning their business around. What stocks to buy now is a good question to always ask yourself. These best penny stocks to buy now help to answer that. ARK had bought NNDM stock price and added it…are they still buying NNDM? NNDM should definitely be in the penny stocks to watch list, if you have one. 🙂 Stock Moe’s content is for entertainment only. In no event will Stock Moe be liable for any loss or damage including, without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of Stock Moe content on YouTube, Patreon, and Discord. Stock Moe is no longer a licensed broker/financial planner. All financial decisions made by the viewer should be done after talking with a licensed professional. Everything on the Stock Moe channel is for entertainment only. Stock Moe’s video content may change over time, or become outdated or invalid. Stock Moe reserves the right to change his opinions and entertainment content at any time. I also have affiliate links in this description that I can earn money off of to help support the channel. Thank you from Stock Moe. #stocks#pennystocks#pennystock

How To Weather Stock Market Storms

Life in the era of COVID-19 is certainly unlike anything the vast majority of us have experienced in our lifetime. The last time the world faced a pandemic of this magnitude, the year was 1918. People around the globe struggled to combat a new foe in the form of a flu pandemic which washed over the world’s population over the course of two years.

Today, we are fortunate to have many more tools to study and manage the coronavirus. We are learning more each day, which will hopefully lead to a faster resolution this time around. But there is one factor of our current situation that feels quite familiar—that has returned cyclically time after time over the course of my career: the corresponding stock market storm we’re seeing. That isn’t new—and it isn’t a once-in-a-lifetime event.

The Great Financial Crisis. The dot-com bubble. Black Monday. Through each of them, I’ve fielded calls and visits from clients who worried that everything was on the line. But just as proper gear and a safe place to hunker down can protect one even in the worst of storms, so can a solid investment plan. Because my clients and I had prepared for circumstances like the ones we faced, they were able to make it through—reaching a period of sunny skies with much of what they had worked so hard to earn intact.

What can you do to weather a stock market storm? Here are a handful of strategies to help ensure your safety even in an economic downpour.

Harness the power of dispassion

When the market outlook is good, people tend to coast, letting their investments enjoy the ride. But when it seems as if trouble is brewing, they begin watching the market—and their accounts—like a hawk, panicking at the slightest provocation.

Unfortunately, that panic can lead to poor choices and less-than-stellar results.

The best thing you can do when the clouds roll in is harness the power of dispassion, understanding that if you’ve put the proper safeguards in place, a little wind and precipitation won’t blow the whole house down. Doing so will protect you from unnecessary losses and missed opportunities when the market rebounds.

Let diversity work for you

The benefits of diversity extend to so many areas of our lives—and the way we allocate and manage our money is no exception. Ensuring a diversity of assets helps you avoid placing all of your eggs in that proverbial basket. And though you may have been counseled about growth versus value stocks, diversifying across different market sectors and a variety of bond types is important. It’s really about building a portfolio tailored to your unique circumstances—whatever they may be.

A good advisor will curate a mix of holdings that will withstand market trials and tribulations and ensure you have the funds necessary to cover the cost of any upcoming life events—from your daughter’s wedding to a grandchild’s college tuition, and even an extensive home renovation. And they will institute a sound plan for tomorrow, whether that entails traveling the world, long-term care for a disabled spouse, a cross-country move, or all of the above. Most important, though, is that your diversification plan is specific to you.

Depend on someone you trust

When it comes to navigating your investments, you can certainly go it alone. Many people do—to varying degrees of success. But you can’t underestimate the power of a good advisor. What does that entail? Someone who moves beyond the conventional, with the experience and know-how to steer your ship through the choppiest of waters based on what they have learned in previous bad weather patches. It’s someone who will take into account your individual circumstances, crafting a strategy meant to fulfill your needs—and who considers not just what you must have to live comfortably, but also what you want.

That’s why I always ask my clients not only what their expenses look like—current and expected—but also what peace of mind looks like to them, and what they would do with their lives if money were no object. Those three inquiries help me compose a complete picture of the individual I’m working with, so I can build a plan that will weather whatever comes their way.

Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.Follow me on LinkedIn. Check out my website.

Debra Brede

 Debra Brede

Debra Brede had a different idea in mind when she founded her investment management firm in 1989. A decade of industry experience made her realize that the needs of individual clients weren’t always best served by the typical Wall Street business model, where a firm sells its products to meet its sales goals. At the firm that bears her name, the individual needs of each client would be the primary focus. Today, D.K. Brede Investment Management Company delivers investment management services to corporations, municipalities, retirement plans, charitable trusts, and high-net-worth individuals based on the principle that every recommendation made is dependent solely on a client’s individual needs, as determined personally by Debra Brede herself. Debra is now a frequent media commentator on investment-related topics and is recognizable to tens of thousands of CNBC and Fox Business news viewers around the world. She’s also been featured in the Wall Street Journal, The New York Times, Businessweek, Financial Times, Reuters, Bloomberg, Forbes, and Kiplinger’s Personal Finance. Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.

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Stock Market Rout: Here’s What Caused The Worst Sell-Off Since March

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The stock market tanked on Thursday amid fears of a possible second wave of coronavirus infections as states that have started lifting lockdowns begin to see a record number of new cases.

KEY FACTS

The Dow Jones Industrial Average fell 6.9%, nearly 1,900 points, in its worst single-day drop since the coronavirus sell-off in March. The S&P 500, which fell 5.9%, also had its worst day since March.

Stocks plunged on rising concerns about a second wave of coronavirus infections: Many states that loosened lockdown restrictions saw a spike in new cases.

Texas and Florida, for example, were among some of the first states to reopen, and they are now reporting record numbers of hospitalizations. A total of 21 states reported an increase in new cases last week, according to a Reuters analysis.

Thursday’s sell-off follows the Federal Reserve’s grim update on the economy: A day earlier, the Central Bank forecasted a long recovery, with unemployment set to remain high for years and interest rates staying near zero until at least 2022.

“Fed chair Powell yesterday really reminded investors that there’s a huge, huge gap between the economic reality and the market reality,” Tom Essaye, founder of the Sevens Report, told CNBC. “Just that reminder combined with a lot of the second wave headlines prompted an opportunity to take profits… stocks can’t go up forever.”

Expectations for a quick economic recovery are dwindling: Investors are now dumping stocks that would benefit from a reopening—including airlines, retailers and cruise operators—after they led the market rally over the past month.

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Wall Street traders are instead rotating back into stay-at-home stocks, such as Netflix and Zoom, as well as big tech companies like Apple, Amazon, Microsoft and Google-parent Alphabet.

The stock market’s fear gauge, the CBOE Volatility Index, skyrocketed over 47% on Thursday, breaking above the 40 threshold for the first time in over a month.

Crucial quote

“The REAL reasons stocks are down doesn’t have much to do with fundamentals – the tape had become GROSSLY overbought (with valuations hitting multi-decade, unsustainable highs),” according to Adam Crisafulli, founder of Vital Knowledge. “A lot of reluctant buyers were sucked in off the sidelines these last few weeks, creating a giant downside air pocket that’s now being filled.”

BIG NUMBER: MORE THAN 44 MILLION.

That’s how many people have filed for unemployment over the last three months, as the coronavirus pandemic forced businesses to shut down on an unprecedented scale. Jobless claims fell for the tenth week in a row on Thursday, with 1.5 million more Americans filing for unemployment during the week ending June 6. While that number continues to decline, millions are still unemployed and the job market’s recovery is expected to take years.

Tangent

“We can’t shut down the economy again,” Treasury Secretary Steven Mnuchin told CNBC on Thursday morning. “I think we’ve learned that if you shut down the economy, you’re going to create more damage,” he warned.

Key background

Both the S&P 500 and Dow are still up more than 40% from their coronavirus low point on March 23. Federal Reserve chairman Jerome Powell reiterated at his press conference on Wednesday that while “there is great uncertainty about the future,” the Central Bank is strongly committed to doing “whatever we can, for as long as it takes” to help support the economy. Before this week, stocks had continued to rally on optimism about reopening the economy and a faster-than-expected recovery from the coronavirus recession: The S&P 500 on Monday turned positive for 2020, fully recouping its losses from the coronavirus selloff earlier this year. But the market is now taking a hit amid rising concerns over a second wave of coronavirus cases. With investors rotating out of stocks that would benefit from an economic reopening, big-tech shares have made a comeback: That helped boost the Nasdaq to a new record high on Wednesday, when it closed above 10,000 for the first time ever.

Full coverage and live updates on the Coronavirus

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I am a New York—based reporter for Forbes covering breaking news, with a focus on financial topics. Previously, I wrote about investing for Money Magazine and was an intern at Forbes in 2015 and 2016. I graduated from the University of St Andrews in 2018, majoring in International Relations and Modern History. Follow me on Twitter @skleb1234 or email me at sklebnikov@forbes.com

Source: https://www.forbes.com/

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Feb.28 — Fear over the spread of the coronavirus tightened its grip on global markets Friday, with stocks across Europe and Asia plunging a day after the worst rout on Wall Street since 2011. Rupert Harrison, multi-asset strategies portfolio manager at BlackRock, discusses the sell-off on “Bloomberg Surveillance.”
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