So lately this week, we have come across a lot of people saying this is a repeat of 2008 or at least 2018 yada yada. Although I am not a doom and gloom investor as I loathe party poopers, I think it wouldn't hurt to prepare than take unnecessary windfalls that could have been prevented if you did.
I think there's a high chance* (emphasize on chance) that there could be because of multiple evidences. First, strong dollar as US fixes and tighten its economy while others keep printing + inflation. This usually predates a downfall because a strong dollar hurts profit margins abroad of international US companies and because earning reports we react to only goes up after the quarter it's referring to obvs.
Second, I think oil prices are still pretty high. Don't quote me on this because I'm not a commodity trader so I defo would like to get more insight and clarity on this but usually in turbulent times, stock market drags oil prices with them (see 2008 and 2018), maybe because business and industry operations stagnates(?) and panic sets in but I still think 95$ per barrel is still pretty steep.
Third would seem like nitpicking now but there's a market cycle that big downfalls usually happen in late-early decades. (Housing in 08, dotcom in 01, oil in '90, oil in '81, oil in '73) notice how it's almost all oil xD. But yeah, idk, there's a chance. There's also somewhere I read (can't remember where anymore) but the reason for that is because that's usually how long it takes for the market to unlearn the lesson of the previous crisis.
But in spite of this, we never really know until it's too late (or is it? *evil smirks* ((okay i'd stop now))). I mean, you can stay all optimistic if u want but it wouldn't hurt for you to prepare for this. How? Almost all downfalls in the stock market bottoms in Q4, then consolidates in Q1 of next year before bouncing back, except for black swan events. A counterpoint by the bulls is that this is just another black swan because of the war on Ukraine but I think that's not the only factor here. But either way, it's just 2 months before the moment of truth. Would you really miss out so much by keeping a portion of your portfolio in cash for 2 months to mitigate your risk? I know for me I wouldn't. What do you think?
Leave a Reply