The Market Crash Is Virtually Guaranteed
When markets pull back, you need to have cash on hand.
The worst investors sell one stock and get into another; that makes no sense, unless there’s an actual reason to do so (and I’ll explain one such reason today). Next, there are those who leverage, using borrowed funds or margin. This aggressive strategy is only appropriate with deep market crashes (20% and more) and only when the interest rate is sensible {around the pace of inflation}.
Another way of raising cash is to sell unrelated assets {not stocks}, but again, this is not ideal.
If we don’t have to sell, we shouldn’t.
The best and most appropriate way to raise cash is to have it ready, as part of your overall strategy.
We cannot be naïve about crashes; they happen every year!
This one, by the way, doesn’t look like it ended, judging by the willingness of retail investors to buy the dip:
Courtesy: Zerohedge.com
The problem that investors are facing is that Powell flip-flopped.
Markets knew exactly where Powell stood, but he came out after the meeting with Biden and after his re-nomination with a new approach, calling the word ‘transitory’ unbefitting of the situation.
The markets are scared that Powell is making political decisions, not economic ones.
It’s not Omicron and it’s not the budget; the only thing making indices and individual stocks sell off like crazy is interest rate uncertainty.
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Courtesy: Zerohedge.com
As you can see, this is what markets believe; in June, rates are going up.
Interest rates are gravity for stocks, especially for growth stocks, and even more particularly, to non-profitable growth stocks.
If you’ve been looking to own one of the best disruptors out there, 2022 is the year to accumulate.
Undoubtedly, the market is as expensive as it’s ever been:
Courtesy: Zerohedge.com
The thing is that it’s worth it!
The world has changed, and we must all realize that stocks are expensive in a world where central banks buy bonds for negative-yielding coupons.
One thing to keep in mind is that cash could prove valuable, even with inflation as high as it is, because the markets could crater by much more.
Tax-loss harvesting is underway right now and that’s your opportunity to enter the markets before December ends, but keep this in mind: DECEMBER 15TH.
When the FED meets next, it will be the most important policy meeting of 2021 and it will alleviate the concerns the markets have, because Powell will explain where they stand.
Time is on your side. Be patient.
If the FED continues to be politically managed, gold will flourish.
Best Regards,
PortfolioWealthGlobal.com
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Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!
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