Worried about another stock market crash? Read this post to understand stock market crashes and my preparation for the next one.
I’ll show you why people want to know the next stock market crash prediction, and why you don’t have to be scared.
Finally, I’ll reveal my prediction on when the next stock market crash will occur and why (by the way: I predicted the stock market crash in 2020 and 2022, let’s see how we can prepare for the next downturn together).
- Stock Market Crash: Overview
- Stock Market Crash of 1929
- Stock Market Crash of 1987
- Stock Market Crash of 2000 (DotCom)
- Stock Market Crash of 2008
- COVID-19 Global Pandemic
- Is the Market Overvalued Today?
- Should We Sell?
- The Market Will Crash Again. That's Ok.
- How to Beat the Stock Market Crash?
- Final Stock Market Crash Prediction
- What's Next?
Stock Market Crash: Overview
The stock market has crashed every so often for a hundred years.
But our memories are short-lived.
No matter how many times the stock market crashes, the next one feels just as unexpected and just as painful.
How should you protect yourself from the next market crash? First, you must understand why crashes happen.
What is a Stock Market Crash?
A stock market crash is a social phenomenon. It is a human-created spiral triggered by economic events and crowd behavior psychology.
Stock market crashes happen when these 4 factors occur together:
- Stock market prices have been increasing for a long time.
- Everyone is overly optimistic about the future.
- The P/E ratio of the market today is higher than the historical averages.
- People borrow money to buy things at a high debt-to-equity ratio.
Disasters and government regulations also contribute to stock market crashes. But crashes mostly happen because people spend too much money they don’t have to buy things above their right values.
Let’s look at five significant stock market crashes in history and review why the market crashed in 1929, 1987, 2000, 2008, 2020, and 2022 and what lessons can we learn to help us avoid a future crash.
Stock Market Crash of 1929
The stock market crash of 1929 is the worst stock market crash in human history. It destroyed a generation of people and changed their relationships to their family, to each other, and to the government.
But for the six years leading up to 1929, it was euphoria.
The stock market has increased by 345% for six years straight, and people were borrowing money left and right to buy more stocks.
The good times felt like it’s never going to end.
But all good things end. On Black Tuesday of 1929, the stock market crashed for the first time by 10%.
And for the next three years, the market kept getting worse.
At the worst point in 1932, the stock market lost 89% of its value from the peak.
It would take 23 more years, a whole generation, for the stock market to climb back up!
Imagine losing 89% of your money and waiting 23 years to get it back! Would you have the patience to hold for that long?
The Lost Generation
1929 is a picture of unimaginable loss, so bad that we call that period in
For a decade, half of the people in the U.S. lost their jobs and the other half barely worked part-time.
People survived on beans and potatoes. Men fought over barrels of garbage as food scraps for their families.
The Great Depression brought proud men and women to their knees and led millions of children to grow up hungry and anxious. Many never got over the trauma for the rest of their lives.
The first few minutes of the video below talks about the Great Depression’s economic hardship and its psychological impact on the people.
Can the 1929 Crash Happen Today?
Much of our anxiety about the stock market crash comes from our fear of what happened to our grandparents.
Can the Great Depression happen to us? Can a market crash today wipe away all of my investments, forever?
No. I do not believe so.
Another stock market crash will happen. But another Great Depression will likely never happen again. Here is why:
Bad Government Decisions Leading to a Depression
While the 1929 stock market crash destroyed the stock market, the Depression is made worse by other factors unrelated to stocks.
When the stock market crashed, people panicked and withdrew their bank money, which caused the banks to go bankrupt because there was no Federal Deposit Insurance.
As such, people not only lost their stock investments, they also lost their savings.
And then things got worse:
At the time, the United States was on the gold standard and promised to honor each dollar with a value in gold. So everybody put the little money they have left in gold.
This made the gold prices soar, and the Fed feared that it would soon run out of gold. So the Fed decided to increase interest rates in the hope of improving the dollar’s value against the Gold.
Huge mistake.
Super high interest rates stopped all businesses from accessing loans, creating massive layoffs, widespread bankruptcies, and a complete collapse of the U.S. economy.
The stock market crash of 1929 alone is bad, but not deathly. The bank runs and interest rate spikes created the Great Depression.
Government’s Effort to Learn from Its Mistakes
Today, we’ve learned our lesson, and written laws to ensure we don’t make the same mistakes again
Nearly every bank in the United States is now protected by the FDIC so banks won’t run out of money. And the dollar is no longer pegged to the gold.
The Fed also knows to never spike interest rates when the economy is on the rough. Quite the contrary, the Fed now actively lowers interest rates during recessions in order to promote business lending and growth!
Stock Market Crash of 1987
On Monday, October 19, 1987, now known as Black Monday, the Dow Jone Industrial Average fell 23% in one day.
This crash happened on an ordinary day without any significant news.
At the time, this was the largest single-day percentage decline.
When the crash first happened, prominent economists predicted we are on the cusp of another Great Depression. And people panicked.
But the smart guys were utterly wrong. The economy grew steadily after the crash, and barely a year later by early 1989, the market recovered.
People who held onto their money recovered in no time. Those who kept investing saw
And the panicked ones who sold after the crash lost big.
The Crash That Isn’t
We now realize that the 1987 crash was not due to over-valuation but to a glitch in computerized trading.
Somebody somewhere made a mistake on a stock price, and this triggered all the computers to automatically “dump” stocks. We caught the error eventually, but the damage is done.
Regulators now have “trading curbs” or “circuit breakers” to halt the stock market during substantial price declines so such events will never happen agin.
The market crash of 1987 is very different from that of 1929. It did not destroy a generation. On the contrary, 1987 is an unprecedented opportunity for people to get rich quickly.
Stock Market Crash of 2000 (DotCom)
Now let’s talk about the first tech boom.
The stock market crash of 2000 is all about irrational exuberance. It is a stock market crash entirely created by the mania of this new technology called the internet.
This is why we call it the Dot.com bubble. And there is a lot of similarities between the Dot.com bubble and what we have now.
The stock market crash of 2000 is so important that it deserves its own special guide. And so I wrote a separate post dedicated to the DotCom crash.
And not long after the DotCom crash, only eight years later, another crash happened.
We are talking about the 2008 Mortgage Crisis: the crash that traumatized the millennials generation.
Stock Market Crash of 2008
Less than 18 months after the stock market hit its all-time high in 2007, it dropped by 50%.
Thus begin the recession of 2008.
In the years leading up to 2007, the real estate market in the United States experienced unprecedented growth.
Housing prices across the U.S. doubled in a few years.
People borrowed money to buy houses so they can “flip and sell” in a few months.
If this sounds familiar, well, it’s happened before. But this time, it’s not the stocks; we have a real estate bubble.
Eventually, home prices became so high that buyers stopped buying. And so the home prices fell, and fell, and fell…
People got stuck with a mortgage they can’t afford and a house worth half as much, forcing them to declare bankruptcies.
But then things got worse.
Real estate bankruptcies did NOT just end in the real estate market…
Credit Swaps Turning Real Estate Crash into Stock Market Crash
When enough people defaulted on their mortgage loans, the banks who
And that’s where unexpected things started happening.
These banks not only sold mortgage loans to each other but also sold them to insurance companies, teacher’s pension funds, car companies, and other investors in the form of complex derivatives and credit default swaps.
So all of a sudden, it wasn’t just the banks who had bad mortgage loans, it was every Fortune 500 company and people’s 401Ks.
Credit swaps and mortgage derivatives were financial instruments designed to spread the risk around. But it ended up giving the risk to everyone and hurting everyone.
And when famous investment banks Bear Stearns and Lehman Brothers collapsed, everybody followed.
The U.S. Treasury Department poured billions of dollars to save companies, from banks like Fannie Mae, Freddie Mac, to insurance giant AIG and auto companies General Motors and Chrysler.
Hundreds of thousands of people lost their jobs. Banks stopped lending and investments froze.
Even though interest rates went to 0%, nobody was borrowing and growth simply stopped.
2008 Recession Recovery
The stock market struggled for another five years before hitting its strides again in 2012.
For those that kept their money in the stock market, they would’ve recovered all of their losses in five years. That’s a lot of waiting (and requires balls of steel in light of so many fears), but not as bad as the 23 years it took for the Great Depression to recover all of the loss.
Steady Recovery from 2008
By 2012, the United States stock market is on the upswing. Between 2010 to 2017, the stock market price increased by 215%, which is an average of 12% growth rate every year for over eight years.
Toward the end of 2017, the United States government passed a sweeping tax cut that among many changes, cut the corporate profit tax from 35% to 21%.
The new law sent the stock to an all-time high, again.
Many smart people thought the 2008 recovery maxed out by 2016.
Little did they know that 2016 is only the start of another bull run!
But if there is a lesson we can learn from the past, it is that when something feels euphoric, it’s probably time to get nervous again.
Looking at historical data, we see that a recession tends to happen every seven to ten years. By this logic, a recession is due in 2020.
Which is why in the original blog, I predicted that a stock market crash will occur in 2020.
COVID-19 Global Pandemic
And the stock market did crash in 2020. But for a totally different reason!
I had assumed that the tech bubble would burst in 2020, not that a bat virus would sweep the world to kill people.
Self-Induced Shutdown in 2020
Most stock market crashes are not self-induced. Businesses don’t stop producing voluntarily; they stop because people no longer want to buy from them.
But in the case of a global pandemic, we were forced to stop our lives. This goes to show what I’ve said before: every stock market crash is different.
When Wuhan went into lockdown in late January, the rest of the world was watching China carefully.
Most watched as if it would never happen to them.
But then things hit all of us at once.
Italy started to go on alert. Then it was the rest of Europe. Around mid March, the United States went into lockdown.
I remember going home from work on my last day feeling apprehensive.
My neighborhood was dead silent during those first few weeks of the pandemic.
No noises from cars or people. Only the sound of birds chirping across the bright skies of a silent spring.
Resurrection from Death
As the world stopped, the market reacted very badly because we had no idea what is going to happen.
Will this virus wipe all of us out? Will this last days, months, or years?
The stocks that suffered the most were stocks in Travel, but the entire stock market went into a full decline.
In two weeks, the Fortune 500 stocks went down 31%.
And yet, something remarkable also happened.
We started to buy things online at an unprecedented rate. Some of us found that we are able to work fully remote.
We got married over zoom. And soon enough, we had vaccines.
The world is never going to be the same again, but businesses started producing.
The stock market, reacting to hope and unprecedentedly low interest rates, saw one of the fastest market crash recoveries in the history of all recessions.
The market went down by 31% in 2 weeks, then fully recovered in 3 weeks. It went y so fast that nobody was able to time the market and buy low and sell high.
Meme Stocks & Crypto Euphoria of 2021
2021 is the year for the record books. Stocks and crypto currencies went crazy, much like what happened in 1927 and 2006. Luck is confused as skills. People were euphoric.
Everyone is a smart trader because you would make money investing in just about anything. People made millions of dollars overnight through sheer luck (that they of course attributed to their brilliant mind).
A new thing arrived: meme stocks: where retail investors together, through social media, drove worthless companies up by thousands of percents. Crypto currencies were more or less the same. Elon Musk would tweet about a Shiba Inu and a useless cryptocurrency named after a dog would shoot toward the moon.
Some people call it investing through community building. But what differentiates a community from senseless euphoria?
Inflation of 2022
But just when we thought the world is in full swing again, inflation decided to visit us in late 2021.
We really haven’t experienced inflation since the 70s and early 80s. So we didn’t really care at first, and then it slapped us in the face and woke us up.
And inflation persisted through 2022, staying stubbornly above 6% despite the Federal Reserve’s efforts to tame it through repeated raises in interest rate.
The Ukraine War made inflation worse because with the war came supply issues that further increased prices: first it was gas, meat, and wheat. Then everything became more expensive.
The federal reserve knew how badly a spiraling inflation can completely crash a country so they continued to sharply and swiftly raise interest rates like never before.
Suddenly, borrowing isn’t cheap anymore for the first time in over a decade.
We had near zero interest rate for the last 10 years, but finally, no more.
The rising interest rates had a interesting effect on the bond market.
Because we’ve had near zero interest rates for more than 10 years, the sharp interest rate increase means that long-term bond prices (those with near zero interest rates) dropped.
Meanwhile, the rising interest rate ALSO halted the euphoria. The hottest stocks from the COVID pandemic, the meme stocks, and the crypto mania went into free fall, many decreasing 90% (looking at you, Peloton).
For the first time in history, both stocks and bonds dropped by more than 20% in a single year.
This is unheard of.
In the chart above, you see that during past recessions and growth periods, stocks (S&P 500) and bonds (20+ year Treasury Bond) moved in opposite directions.
If they had moved in the same direction, bond declined far less than stocks. This is why people buy a mixture of stocks and bonds to reduce risk.
But in 2022, not only did the risk-loving people who went all in on stocks lost money, the risk-adverse retirees who balanced their stocks with bonds ALSO lost a lot of money.
What a year to be alive.
Is the Market Overvalued Today?
The stock market tends to swing from overvalued to undervalued as the market goes from euphoria to recession.
We measure the likelihood of a recession by looking at how overvalued the stock market is using the PE (price-to-earnings) ratio.
The most accurate form of PE ratio is the Shiller PE ratio, also known as the CAPE (cyclically adjusted price-earnings) ratio. The ratio is popularized by the Nobel Prize-winning economist Robert Shiller of Yale University.
Using Schiller PE to Predict the Next Crash
Below, you will see the Shiller PE ratio from 1881 until 2021 in solid blue, and a lighter blue to represent my forecast line.
Think about these two lines like this:
- When the solid blue (actual Shiller PE ratio) is above the light blue (forecast): the stock market is overvalued.
- When the solid blue (actual Shiller PE ratio) is below the light blue (forecast): the stock market is undervalued.
Scroll to the left to see more data:
You can scroll across the screen to see more data.
The Shiller PE ratio tells the story perfectly in the past 20 years.
Well, you can see from the chart that the stock was overvalued leading up to the 2000 stock market crash.
When the 2008 recession hit, the stock became undervalued as the solid blue falls below the lighter blue.
But since about 2014, the stock has become overvalued again.
The 2020 pandemic briefly lowered, went right back u pagain in 2020, but then went back down against in 2022.
However, the chart above shows that the current Shiller PE ratio, despite the 2022 stock market crash, is STILL slightly above the pale blue line, which means despite the 20% drop in both stocks and bonds, the market is still not as undervalued as we think it is.
So is another crash coming soon?
Should We Sell?
Based on what you’ve read, it seems because the stock market is overvalued today, we should sell because a crash will come eventually.
If that’s what you think, then you’re wrong.
Your logic is sound because we will always have another stock market crash.
But I am going to show why you should never sell your stocks in anticipation of a crash.
Below, I’ll give you four reasons why you should never try to act smart by “buying low and selling high” no matter how confident you are:
- Stock prices are statistically proven to be RANDOM.
- It’s IMPOSSIBLE to time the market (might as well call it gambling).
- Being optimistic OR pessimistic about the market hurt us equally. Solution? Don’t feel. Inaction is the best action.
- Over the next decades, stocks will always go up more than they go down.
Reason#1: Stock Prices Are Random
There is plenty of empirical (i.e., well-researched, data-backed) evidence telling us that the prices of stocks follow a random walk. This means the movement of stock prices from day to day DO NOT reflect any pattern.
Surprised? You should be. Our eyes think we see a series of ups and downs, and we think we see some patterns.
But even if you flip a coin every day for many days, you’ll also see patterns of ups and downs, even when knowing that coin flipping is random.
The stock market’s path every day is just like a series of random coin tosses. Past prices cannot and never have been able to predict future prices.
The chart below shows the outcome of 10,000 random coin tosses, a pure random walk.
If you saw a pattern, you’re biased to see patterns just like everyone else!
Reason #2: It’s Impossible to Time the Market
During the Dot-Com bubble of 2000, the stock market became technically overvalued starting in 1996, but the stock market did not crash until four years later after it went up by another 50%!
Had you pulled out your money in 1996, you would’ve lost big!
Trying to time the market by “selling high and buying low” is equivalent to rolling the chips in Las Vegas.
You could be years too early or days too late.
Be very aware of investment strategies that exploit anomalies, trying to predict future prices based on past prices.
Remember what we learned above: there are NO trends; everything is random, so past prices never predict future prices.
Any wins you might have banked from day trading is just pure luck.
Whenever someone on TV says they can predict the future, realize just because you see a pattern from lines on a chart doesn’t mean it isn’t all randomness.
The smartest people get it wrong all the time. What makes you a better guesser other than your urge to roll the dice?
The chart below shows all kinds of reasons people have used to tell you to SELL. But all of these reasons, LOOKING BACK, are wrong.
Whatever is happening today, the world feels like it’s going to end soon. But the world has been filled with scary news and has always felt like it might end.
Yet through the fears, the stock market kept rising.
Reason #3: Both Optimism and Pessimism Hurt Us
Here is what we know: the stock market goes up and down. That’s it.
But nobody knows when the next downturn will begin or when the future growth will kick-off.
There is no point in timing the market because the prices of stocks follow a random walk.
If you are overly optimistic about the stock market, you can get burned. If you are too cautious, you can miss a golden opportunity.
How can we remain neither overly optimistic or cautious? How can we capture the stock market growth while protecting ourselves from a crash?
We simply do nothing.
Research shows that those who forgot they had money in the stock market did better than those who cared about it and checked prices daily.
Why? Because inaction is the best action. Just set it and forget it and you will win.
The chart below shows how many days we had to wait to recover back the loss from a stock market crash.
The wait varied from a few days to years.
It is simply impossible to predict recovery (or crash).
Reason #4: The Stock Market Always Go Up Over a Long Period of Time
Over the entire history of the stock market, we know that stock prices are growing more than they are declining.
The chart below shows the annual stock market change. The green bar represents a growth year and the red a decline.
In the past 9 decades, growth years account for 75% of total years while decline years account for only 25%.
Translation: if you keep your money in the stock market for the long
Over the course of your life, you’ll experience a couple of heart-stopping, jaw-dropping declines, and many small drops. But if you stick with it, the stock market will on average go up, way up.
So put your money in a broad index fund and let it sit and grow on its own. If you’re interested, here are the Vanguard funds I recommend.
In fact, research from 1871 to 2012 has shown that if you had kept your money in the stock market for 20 years, 100% chance you will make a positive return.
More than 5 years, there is a 80% chance you will make a positive return.
The lesson? The longer you stay in the stock market, the higher the chance you will make money no matter when you invest.
It’s not about when you put your money in. It’s about keeping it in for as long as possible, preferably years.
The Market Will Crash Again. That’s Ok.
Nobody knows for sure when it’ll happen, but we know it will happen eventually.
Remember 1987 when most of the brilliant people fail to predict recessions?
It turns out that most economists failed to predict recessions every single time.
Don’t listen to “experts”. Don’t listen to me.
How do you REALLY beat an impending stock market crash? Well, read on!
How to Beat the Stock Market Crash?
We know that market crash always comes and that it’s not something you can predict to avoid. So what can you do?
All you can do is to strive to be neither overly optimistic or cautious and thus, to invest for the long-term.
More specifically, it means that you should:
- Find your optimal allocation of assets
- Make sure you have a nice stash of money in cash and assets not correlated with the stock market
- Go live your life without watching the stock market on a daily basis!
1. Optimize Your Allocation
Invest more in stocks when you are young and less in stocks as you get older. And as you get older, slowly decrease the risk of your portfolio.
Not sure about your allocation? Follow Vanguard’s advice:
- Allocate 90% of your investment in the stock market until you are 40
- Allocate some of your stocks to international.
- By the time you retire, you should have 50% of your investment in stocks, then 30% by the time you reach your mid-70s.
To learn more about how to select across thousands of Vanguard funds, read this guide that talks about the best Vanguard funds for every stage of your life.
If you are nearing retirement, check out my guide on Vanguard Wellington, it is my all-time favorite fund for retirees.
2. Invest in Cash and Uncorrelated Assets
As you get older and mainly when you are closer to retirement, the money you invest outside of the stock market becomes more important.
You want to make sure when the stock market crashes; your non-stock assets do not crash, too.
For decades, the default option to buy uncorrelated assets is to buy bonds. However, in recent years, stock and bonds have risen and fallen in tandem due to near-zero interest rates.
But the Federal Reserve, starting in 2021, has increased interest rates. I believe we will be staying in high interest rate environment for a while. And that’s a good thing. It means we will have a viable choice between two uncorrelated assets: stocks and bonds, again.
3. Let the Stocks Stay in the Stock Market
You’ll be fine in the long run if you allocate your money across stocks, bonds, and cash. And maybe a tiny bit of crypto.
Have enough cash to spend for 2+ years, and just let the stocks sit there.
Even though a stock market crash might be coming, never try to time the market because that would just be gambling.
The chart below shows that sometimes you have to wait a long time before getting returns, but the wait is always (always!) worth it.
If you had bought stocks in 2000, you had to wait until 2013 to recover! That is 12 years of waiting. But the years after 2013 were the best, ever, at growing your net worth.
Rest assured, the market will always recover. Be patient. Stay in the game.
If you are young, live your life and invest in the long run.
If you are near retirement, make sure you have less than 50% of your assets in stocks and then you should be fine, too.
Get out of your daily stock market monitoring and go live your life.
Final Stock Market Crash Prediction
So this is my final prediction of the stock market crash:
- We’ll have another banner year in 2019 (Update: CONFIRMED)
- The market will crash in 2020. (Update: CONFIRMED)
- Will it crash again? Yes, definitely. Maybe 2022. (Update: CONFIRMED)
- When is the next crash? I predict we are done with giant crashes in 2023. Instead, we will see inflation stabilize, but interest rates still hovering above (goodbye zero interest days!).
- I predict we will continue to experience weakness in the stock market, a real rebound of the bond market (after the 20% crash we saw in 2022), and that going forward, without real innovation or the death of Putin, we will be living through a new era of flat-to-positive growth. Will write about it soon.
But that’s not going to make me do anything differently this year, next year, or the year after.
I’m going to keep investing as much money as I can in the stock market knowing that I can’t predict the market and the smartest people can’t predict the market because it follows a random walk.
And if I invest in the long run, I will win because the
Still feeling scared? I’ve written a brand new post about the psychological hacks that can help you win during a recession. Make sure you read it.
What do you think? Are you as comfortable as I am to do nothing? Do you think you can predict a market crash? Comment below and let us know!
What’s Next?
Ever wonder, “Am I rich?” Read my latest analysis on the Average Net Worth by Age: What Is Considered Rich?
Vanguard is great, but out of its 3,000+ mutual funds, which one is for you? Check out Best Vanguard Funds for Every Stage of Your Life
Learn the secrets that make the Vanguard Wellington Fund the miracle to retiring wealthy. And whether you should this Vanguard Classic.
Anonymous says
Probably early in 2019….These guys will have a jump on it
Veronica says
Interesting – can you elaborate on why you believe it’s coming up so soon? Have you prepared for it or are you going to HOLD? What do you think is going to be the trigger event that unleashes the flood?
Patrick says
Very interesting and easy to understand article! Thanks 🙂
Veronica says
Thanks, Patrick! May our stocks win in the long-run. 🙂
David says
Very concise. Thank you. I love the coin-toss chart. I stared at it for a very long time, much like I do a chart of the S&P 500.
Jeff Wallen says
What happened this year? Was it the crash you predicted for 2020?
Veronica says
Hi Jeff – I predicted a crash in 2020, but certainly not due to a global pandemic. The crash also quickly disappeared and became one of the biggest bull runs. All of which is to say that I’m not in the business of predicting stocks, I’m for long-term investment. Anyways, 2020 is not over yet, so anything could happen between now till the end of the year. Hold on tight!
Ray L. says
Great article! In your opinion how long for it to get back to normal?
Veronica says
Thanks! When will we get back to normal? We are technically back to normal (that is, pre-COVID highs in the stock market) already. But is the real crash not here yet? Nobody knows. The trick is to not panic and sell when there is a crash (because you might miss the bull run that follows), and not get too greedy and buy more than you can handle (because you will not be able to handle if there is a crash). Just keep investing steadily. Personally, I have a few stock bets that I am bullish on for the long run and I might boost my position in them just slightly without putting all of my eggs in one basket. I’ll share the details of what I’m betting on in a post soon. Make sure you subscribe to get the alert when it comes out. Veronica.
George Luniv says
The crash is mainly based on sentiment and algorithms. But algorithms act sooner than our sentiment regardless of the technicals and fundamentals, when the lemmings decide to run off the cliff they do. Govt. Policy also dictates the smart money regardless if the lemmings action’s. History is a guide to future’s results. Study your history , looking for common turning points. That’s my input.
Veronica says
You summarized it nicely George!
tintin says
Hello Veronica.
It is a pretty cool page you have, very informative and well based of historical facts. I was one who was very lucky and predicted the march2020 crash, so i took all my eggs and put them in the Money-market for 1 month, then re-invested back in early may, so i made a great win (on paper – because i did not cash anything). Now i re-did the same thing. 50% of my stuff is back to in the Money-market.
I feel as you do… A crash is inevitable… but when? nobody knows, but very soon is my own thoughts…less than a year.. why?:
1- We are over due to a crash mathematically.
2- When world governments stop “giving” money left, right and center, time will come to pay this ridiculous overspending, and people will have to suffer huge taxe increase… inevitable.
3- MOST important. When rich countries of the G-20, will have vaccinated their own population to reach herd immunity… TROUBLE WILL HAPPEN…Why?
Now, concentrate my new friends…Here is the human behavior: Poor countries will need our help for 2 main reasons:
a)— G-20 countries are going to have HUGE PRESSURE TO FEED the world and VACCINATE the world, FOR HUMANITARIAN PURPOSES, of course.
b)— G-20 countries are going TO BE SCARED OF THE VARIANTS, these “mutations” are going to happen in all countries not vaccinated… Why?… statistics!!!
Eventually, a mutation WILL happen that will be more dangerous… Imagine one that mutates to affect drastically the cerebral effects already present (leaving people alive but mentally inept), or gets more affinity to genital reproductive organs (leaving people of 14-45 years old infertile), or just resistant to actual vaccines… Result: goverments will panick and ALL rich countries will HAVE TO help the world vaccination, at very rapid speed… 8 BILLIONS people. Who is going to pay?…markets will crash. If One person is left in the world, he could bring it home by airplane…
Mutations in humans happen also. For exemple how many Trisomic-21 are in the USA? , let alone all other mutations creating handicaped new borns?… millions.
Viruses breed every 3-8hours, humans every 20-30 years…So virus do trillions of trillions of mutations compared to humans… maybe 99.99999% will be defective… as our trisomic-21… and these mutation die of their own…. But a profitable mutation, for the virus, WILL take over the entire species of Covid-19.
Humans do the same but slower. Homo sapiens are gone because “Cro-Magnon man” (= modern humans) took over about 50,000 years ago… The stronger breed takes over the world… In very species…all the time…Do you see a hairy, monkey-like “Homo Sapiens” around you?… No… because the breed of “modern humans” took over…so will do the virus.
However… If it mutates to something more DEADLY, the spread will decrease, because the virus would kill many humans before they can spread the disease… But Even that will create a crash, because or the panic of dying, but the spread will cease rapidly, so economy will start back rapidly.
What do you think?
Veronica says
hi tintin – I’m impressed you’re able to pull yourself out of the market in March and then have the guts to put everything back in only a month later! Most people who took their money out completely missed the crazy run we just had.
As to your prediction, you might be right, we don’t know. Come back here at the end of year and let’s compare experiences 🙂
john says
Hi Veronica!
Great stuff you have on your website! I’d love to get your analysis on what’s currently been going on in the market the last 2 weeks or so. Many people including myself have seen drastic gains in the last 2-3 months nearly wiped away in the last 2 weeks.
I’ve heard the terms correction/crash pop up plenty of times, and although we truly don’t know when one will happen, we obviously know one has to happen at some point in time. I’ve read opinions that believe a crash will occur by march end of march due to quad witching occurring on March 19th accompanied by the main culprit of big time hedge funds at war with each other in stocks such as GME(earnings on 3/25) for example.
So if you don’t mind, what is your analysis on what’s going on in the market the last two weeks and what do you predict or foresee occurring in the near future? Will we be pulling out of this very red market soon or is this just the beginning of what is yet to come?
Also, although we had a covid crash in march 2020, some people believe that was a “fake” crash due to complete unforeseen circumstances such as covid and all that did was kick the can down the curb for the “real” crash that’s supposed to happen(whenever that may be). Thoughts on this as well?
Veronica says
Hi John – I just published a guide on the dotcom crash – https://fatfirewoman.com/dotcom-bubble/. I personally don’t think the dotcom crash is coming this year, BUT, I am still investing the same as I would always invest. My behavior doesn’t really change.
Anonymous says
Totally agree…. I called the crash in Feb of 2020….. 12 to 18 months until the greatest train wreck ever!
Veronica says
Come back in 12 to 18 months and let’s chat again and see if you’re right 🙂
Anonymous says
Hello, do you predict a market crash 2021?
Veronica says
Hi – I personally don’t think the market will crash in 2021 (fingers crossed!) BUT – I think if you read this guide, you’ll see that I do not recommend we try to predict when the market will crash (because we’ll very likely be wrong). Instead, you should keep saving and keep investing, and make sure you appropriately balance your risks based on your age and risk-tolerance. It doesn’t hurt to play around and use maybe 5% of your net worth to try to time the market, but never, ever make big adjustments to your investment portfolio based on when you think the market will crash. Hope this helps. Veronica.
William Leong says
Dear Veronica,
Thank you for your insightful article. It was structure, hit the points and easily to understand.
Veronica says
Thanks, William!
Jesper says
Thanks for a nice long read. I agree with you but still keep a larger than needed cash holding atm because I just see to many signs of a crash coming soon.
Where did you get the data for the Schiller PE graph? Is it world data or US data?
Veronica says
Thanks, Jesper! I downloaded the Schiller PE data from this site: https://www.multpl.com/shiller-pe, then I built the graph myself.
Chris says
Very interesting article. I’m in the situation of needing to drop a fairly large sum of money onto the markets but am fairly nervous about the upcoming months. The insane shorting going on with GME and AMC (including ETFs that contain them) could lead to chaos if they get margin called, forcing liquidations across the wider market. There is a lot of movement from the DTCC and Hedge Funds all aligned to a fear of an imminent crash.
While generally I totally agree in dollar cost averaging and investing and holding without timing, given I have a large lump sum it is nerve wracking! One possibility is to go in on dividend stocks rather than growth stocks with a significant hedge on crypto. If inflation continues to rise in the US and with capital gains rising, I do wonder if there will be a flight into crypto.
One question I have is about trailing stop losses. One way to ride the growth stocks is with a TSL set fairly high (say 10%) and just accept that you have that 10% at risk worst case. Of course the risk then is timing re-entry. So just wondering if you have any thoughts re hedging crypto and dividend stock vs growth TSL timing versus buy and hold given we all at least suspect something interesting is around the corner.
Veronica says
Hi Chris – thanks for your comment. Let me answer your questions one at a time.
(1) Using trailing stop losses to reduce worst case scenario — there are many fancy financial methods to hedge bets, including making call and put options. I am a very analytical person and have taken a bunch of graduate school courses in financial derivatives, but I don’t play around with these fancy day trading stuff. This is not to say you shouldn’t either, but you have to know what you are doing – and have a model backing up your decisions otherwise you’re just gambling, which means of course, you might win, but it’s due to luck. For example: why 10%? Plenty of stocks fluctuate by 10%, why sell at 10% when it’s just gonna go back up to an even higher number? Panic selling is the #1 reason people lose money during a stock market crash, had they just held steady, most would’ve recouped their money. And you’re right, it’s impossible to time re-entry, that’s another problem with selling, even if you sold at the right time.
If you are worried about a stock market crash – just keep more cash on hand. Warren Buffett has $150 billion cash on hand. It’s not a bad idea to have 15% of your net worth in cash these days. Be aggressive, but don’t be too greedy. It’s okay to keep 15% of cash on hand (or whatever is more than you need) if it helps you sleep at night. And invest the rest in the stock market.
(2) I know growth stocks, especially in tech, have made it huge in the past decade. But what happened in the past decade does not predict the winners of the next decade. So you can definitely still invest in tech, but don’t bet all of your money in tech or worse, in a few stocks. Most of your money should still be in index funds. Take calculated risks that will still allow you to live if you fail.
(3) Lastly, crypto – I have 5% of my portfolio in crypto, had I bet more I would’ve made even more money. But that’s okay. I’m probably not going any higher than putting 5% of my principle in crypto at the moment. If you’re super bullish on crypto, maybe 10%? I personally would not go any higher than that, but that’s just me. Bitcoin being the anti-inflation agent is a theory, not a fact. Lots of things are anti-inflationary, for example, diamonds. But that is not causing all of us to go buy diamonds. 🙂
We live in scary times where the market could be swinging from bull to bear in the blink of an eye. Stay safe!
Mel says
Your comment made me smile because I did the same thing.
Brandie Carriere says
I totally agree with it will happen in less than a year too!!!
Brandiecarriere@gmail.com says
Veronica – Phenomenally well written. Thank you for the info.
Steven says
Very well written! I used to invest in individual shares thinking I had it nailed only to sell in panic if it dipped more than 10%. I agree that putting most of my investment money into ETF large index funds evening the risk and going up (or down) with the S&P 500 index.
Thank you!
Steven
Veronica says
Thank you for sharing, Steve! Kudos to you for recognizing patterns from past behavior and acting on it – most people, myself included, suffer from overconfidence bias and cannot remain honest about our own abilities, especially during these crazy times.
Anonymous says
Next week
Jyoti Prakash Das says
Excellent analysis! But things have changed. SIP! The prudent investors analyse and it’s very clear to exit. But there are those MFs with overflowing funds keep buying irrespective of the valuation. Maybe they have their regulations to stay invested. They would forget valuation, concept of value investing, etc., The only time the markets could really go down would be, when those SIP investors go out of money/jobs and pul out their investments. That’s going to be tough as they have been fully brainwashed into, not time the markets, stsy invested long term, and never exit!
Veronica says
What is SIP?
dan says
I have uninvested money sitting in my Roth IRA account, a few years worth of contributions..
I held out all these years from investing it because I was clueless about where to put my money but now I did some research and decided to put it into a target index fund in my Fidelity account.
Does it make sense to wait until the next market crash to invest it then? (I’m trying to make up for lost time).
I know you shouldn’t time the market but my question specifically is: when a crash happens, these target funds go down as well, if I invest right then, are the fund managers keeping the money in the same stocks that they were invested prior to the crash or they might shift it as they see is best?
Thank you for such great articles and excuse my ignorance 🙂
Veronica says
I don’t think you should wait because you never know when the crash will come (it could be next week, or in 2 years or longer). You also should not put all of your money into the market at once, but rather dollar cost average invest it slowly, so that if you win, you are winning over time, and if you lose, you are not losing big. This means if you have $100K, for example, you can slowly buy $5K worth of stock every month such that you are fully invested into the stock market by the end of two years – if the market happen to crash during that time, you would’ve still been able to keep investing after the crash, if it keeps rising, you would’ve also made some of the gains. You can dollar cost average across two years or one year, up to you, even six months if you are aggressive. But just don’t do it all at once.
Kailash Mane says
Great Article in simple language
Veronica says
Thank you!
Anonymous says
I’m a fairly young, recent,retiree living on my 401k, I can’t afford to lose 30-50 percent right now. Stocks are way overvalued, housing is way overpriced and something is brewing. I’m going to park it in bonds til at least December but I feel something bad will happen to the stock market soon. I also had the same gut felling about the housing bubble crashing in 2007. I’d rather miss on a little gains than lose half right now.
Veronica says
Congratulations on your retirement! I think what you’re feeling makes a lot of sense to me. It’s totally reasonable to park some, even a big chunk of your money in bonds, but I hope you are not completely exiting the stock market. People are saying something is brewing since 2016. You’re absolutely right something is brewing, the question is how much longer will it brew before it spills over.
Anonymous says
All impressive and sensable and superb and touching.
Steve says
HI Veronica!
Wow! Fantastic article.
My wife and I are just now able to start investing into mutual funds towards our retirement (in about 20-25 years away). We have about $4000 in each of our Roth IRA’s in CASH sitting in the account ($2000 already in funds)…. Should we go ahead and invest all of it, half of it, or dollar-cost-average it out for the rest of the months in the year?
BTW, this $4000 in cash (for each of us) is extra money – we are still contributing our 15% into each Roth for the remaining months in the year.
Of course, dollar-cost-averaging it out would be the safest bet… spread it out.
Maybe invest half of it and keep half in cash to “buy the dip/crash??”
Or just go ahead and invest all of it now and forget about it?
Would definitely appreciate your input/advice as we are newbies to investing into our retirement. Thank you!
Veronica says
Hi Steve – thanks for writing! If you are investing a lot of money, I would dollar-cost averaging my investment if I were you. So yes, you can maybe invest $100 at a time over the next 1-2 years so that you won’t be screwed when the market crashes. I am not an investment advisor, so please take this with a grain of salt. There are tools in Vanguard or Fidelity to allow you to automatically make this investment every week or month without having to do this manually.
Keeping this in cash and waiting for the dip might also be a good idea, but you know, nobody knows when the drop will come. I have my predictions, but I am not sitting on a lot of cash, counting on my predictions to come true! So your idea of investing half and keeping half in cash is also just as good as any other idea. 🙂
Remember: Most of your decisions will be fine if you don’t panic and sell all of your stocks when the market tanks. 🙂 That is how the market gets you. Everything else is just icing on the cake.
John Schroeder says
This article is outstanding. Great advice for everyone, written well and referencing true and understandable data.
Veronica says
Thanks so much!
Anonymous says
Debt ceiling here…Republicans won’t allow dems to raise it (and invesors may deem printing more debt not sustainable and not buy treasuries), therefore, the government will need to pay down debt!
No more credit creation by printing bonds to sell to investors and the therefore the FED will have nothing to buy and generate credit. Liquidity will drain from the markets (crypto does that well) and GDP will need to be 30-40 trillion to keep fueling the markets…A crash is inevitable and will be catastrophic and will last for a decade/decades
Veronica says
Hmmm… well come back here in a decade and let’s see if you are right? I’m not as pessimistic as you are, but I think you are not entirely wrong. Fingers crossed you are wrong, though, or else we are all screwed. 🙂
Shery says
Thank you for this outstanding article. It’s art to explain something so complex in such lucid and easy manner. Kudos to you!! 🙂
Veronica says
Thanks so much, Shery!
Pamela says
Thank you for your insight! I’m a young sixtieish retiree living on a pension and received a modest settlement which I invested in bond funds in January 2020! Also, I am an etrader and have built a modest equity portfolio in an IRA on etrade, mainly with low growth dividend stocks. But, I am concerned about the bonds not being as safe a haven as they used to be, since the market has changed with influx of Fed cash….I’m really wondering if I should start pulling out of bonds and into cash. I can’t do this all at once because of tax consequences, so will have to be done little by little. And, I am thinking to start moving out of bond funds and more into cash at about 15 percent level (as you mentioned) beginning in early 2022, hopefully there will be no major downtrend in bonds before then. Again, thank you for addressing all the questions I’ve been searching for, especially about bonds today.
Veronica says
Hi Pamela, thanks for writing in. You are asking an excellent and challenging question that many sophisticated investors are asking, and no one has figured it out. 🙂 It used to be easy before: get bonds and stocks to neutralize your risk. But today, stocks are at an all-time high, and bonds are practically worthless; how are we suppose to allocate? I think what you are doing is mainly right/fine – you want to move some bonds to cash – that’s okay, and you want to do it a little at a time – that’s prudent. You are only doing it to about 15%, which is a pretty healthy ratio. I predict, but really, none of us knows when the stock market will crash. So make sure you don’t get too greedy or too fearful. Leave enough of your money into the stock market, and if it does fall, don’t panic; keep it in the stock market because it will increase again. Meanwhile, have enough savings to live off of, and you will be fine. Good luck out there! You are doing GREAT.
Bobby’s l says
Hello Veronica,
Congratulations on the great writeup – was easy to read an follow, just what I really needed.
I have one question in regards to investing – what is generally the preferred approach for investing – all at once, or in portions. E.g. savings of 10 000$ should go all immediately or they should be divided let’s say 1 000$ each month for total of 10 months?
Regards!
Veronica says
Hi Bobby, thanks for writing. In general, dollar cost averaging is the best practice, which is a fancy name for what you described. So if you have only $10K to invest, do it $1K per month (or even $500 every two weeks, $250 every week) and spread it across ten months is an excellent idea. But if you have $10K coming into your bank account regularly, then you can do it $10K at a time. In addition, there are tools inside Vanguard and Fidelity that allow you to make recurring purchases, so you don’t have to remember to buy every week/month manually.
Mochael Haran says
The fall will last till either the 7th August or the 30th August. These days should define the lows. l predicted the top to either the 4th July or the 9th July. Since then l have discovered a better method to predict turns. This method pinpointed the 13th July as the top. Although markets appear random this is totally incorrect. Markets are as precise as a Swiss Watch. The hard part is how the next turns are calculated. The recent top could have been calculated precisely almost to the exact day.
Veronica says
Hi Mochael – thanks for sharing. It is now August 15th and I think the S&P just hit another all-time high. 🙂 It’s very hard to predict the market
Robert says
Hello Veronica
This was an fantastic reading. Thank you for sharing it!
However I have a question. If stock/crypto market is complitely random short term then how do all day/swing traders make their money? They should be at 0 in the end of the year after thousands of trades.
Veronica says
Hi Robert – Thanks for writing and asking this critical question. Research shows that in the long run (we are talking 10 years or more), day traders make LESS money than if you just put your money in the S&P 500. Not just day traders, most hedge funds (professional traders!) also lose to the S&P 500 index fund in the long run.
It is easy to make money in a bull market such as the one we are in right now, where nearly every stock is going up. So most traders are making money. The person who had invested in Tesla in 2020 is winning in 2021. But market cycles tend to change every 5 to 10 years, and when you look across market cycles, it’s very hard, maybe impossible, for day traders to be winning over the S&P 500. And by losing, I don’t mean they lose everything – so it’s not like they have 0. I mean, they lose to someone else who put their money into the S&P 500 index fund and then went off and lived their life.
Imagine one person putting $ into the S&P 500 and then went and lived her life. Imagine another person day trading all day, stressing out, researching. After ten years, who is going to have more growth? Statistically, the S&P 500 index fund investor wins by a wide margin. That is the essence of this article.
Anonymous says
This was a very informative article. Easy to understand and has helped me gain much more confidence in investing in the stock market.
I really appreciate you doing this and I’m sure many others appreciate it as well.
Veronica says
Thanks, glad you found it helpful.
Jake says
Excellent article, I wish I had written it. I instead, I’ll make sure to link to it the next time I cover this topic.
Veronica says
Thanks Jake!
Robert says
Hi Veronica,
The title of your article caught my attention, especially with the stock market at all-time highs.
Very informative and a reality check, so thank you!
Veronica says
Thanks Robert, glad you found it helpful!
Veronica says
Thanks for reading!
Al says
Great information, every new and old investor should read this.
This is the same advice I give to everyone, the point is you don’t know what you don’t know and even with all the indicators you still won’t know what will trigger a correction or crash because no one can predict the future. It is all speculation and your hunch is as good as the next persons.
Veronica says
Thanks Al, I really appreciate it!
Sid says
If the market was a car would you still take a ride especially when you are confident there is crash due sometime soon (next year or so)…..? Surely, sit and wait and invest afterwards and reap the rewards, rather than pick up the pieces. If everyone keeps investing then an overvalued market will continue unless there is a big trigger event that forces the issue.
Veronica says
Hi Sid – thanks for writing. I don’t trust anyone who says they are confident a crash is coming. Because nobody knows. I’ve been hearing people say a crash is coming since 2016… if they had sat and waited then, they would still be waiting. And yes, I predict a crash is coming soon, sure, but I’m also not going to sell because I could be wrong. It is absolutely okay to be cautious, but remember: you do not want to be overly cautious. And being overly cautious is pulling all of your money out. Read the dotcom crash article I wrote, there’s more details there.
Charles Alexander Miller says
Like everyone else, I really appreciated this article too.
Maybe I’m being naive or reckless, but I don’t have a cash buffer personally. My thinking was if I invested enough, and waited long enough, I could get to a point where I could afford to have all my spare cash invested. Just supposing the stock market crashes, and I lose my job at the same time, I would only be taking out whatever I needed each month for a few months or a year or so max. I’m prepared to take the risk that I wouldn’t be unemployed for years on end. I suppose I could have an accident or long-term illness preventing me from working, but I’ve got income insurance for that scenario. So I feel comfortable with not having a cash buffer.
I also thought if I could only stay invested until I had reached a 30 or 40% gain, in a worst case scenario I would probably lose the gains but would be unlikely to find myself facing a loss overall. If you can afford to put enough in, and you can afford to wait long enough, you’re only at risk of losing your gain rather than making a loss on what you invested.
The third factor that gives me comfort is I have range of mixed asset funds, some of which are very low risk, low volatility and low return. I can use the low-risk ones to at least protect myself from inflation instead of having cash sitting somewhere losing money year after year.
Interested to hear if people think I’m making a terrible mistake, or underestimating how big the next crash might be!
Charlie
Veronica says
Hi Charlie – thanks for writing in. I think you are describing a investing strategy that is higher risk but also higher reward when times are good, which is perfectly fine for people who can afford it, and it sounds like you can :). Without assuming anything about you, I’d say this strategy is fine for a healthy, young person without family obligations (raising a child, taking care of a sick, poor parent, etc.) and educated enough to get jobs. Not everyone is fortunate to be in your shoes, so it does beg the question whether you should go aggressive since you can. After all, you can’t win if you don’t play. Another thing to note is that when tough times come and you are actually in deep, hot water, things aren’t going to be as rational as they seem today. A lot of this is not a numbers game but a psychological game. Meaning: when the market crashes by 30% and then another 10%, and then the news is saying it’ll crash by another 50% next week, and you just got laid off, are you going to have the mental fortitude to HOLD despite everyone (including really smart people on TV) freaking out all around you? That’s something you won’t know about yourself until you go through a crisis at least once in your life. Most people, statistically, tend to overestimate themselves in how calm they’ll remain during a crisis. I invite you to come back here in 10 years and tell me how everything turned out. 🙂 wishing you the best of luck out there.
Thomas says
Thanks for that thorough post.
What are your thoughts on Dollar Cost Averaging vs Lump Sum?
Say you have 25.000USD, would you drop it in the market as it is today august 2021, or would you dollar cost average in with about 2500USD a month, considering the “overvaluated” state of the market (I know, who knows!)
So if we put it all to work today and it crashes tomorrow, lump sum is bad. If we dollar cost, thats better in that scenario. If there is no crash for 2-3 years, lump sum beats dollar cost average.
Thanks
Thomas
Veronica says
I always prefer dollar cost averaging over lump sum. Always do dollar cost averaging to lower your risk. There are people who have done lump sum and made a lot because they timed it right, but if you time it wrong it might be hard to recover.
Anonymous says
Hi Veronica,
Just like everybody else here are impressed by your analytical skill… and very very clearly written market article, I am just as much as well! I’m a noob at this game and you’re definitely the
go-to who takes the jargon into simplicity. What a gift u have.
Thank you for sharing!
Veronica says
Thank you!
shivraj bhosale says
just hold
Veronica says
I agree! Easier said, much harder to do when times get very tough!
Bruce Bouley says
Well, in February 2020 I put my whole 401k into bonds, covid hit shortly after and I watched the dow hit 18,500…… I decided to reinvent in big company stocks and more than doubled my 401k ….. I’m currently back in bonds.
Veronica says
Hi Bruce – thanks for writing in and lucky you. Pulling your money out… I often think about doing that but end up not doing so because I don’t want to pay the capital gains taxes… either way, please come back in a year and let me know how you are doing!
Anonymous says
Very nice post.
doreen tetteh says
Do you still anticipate a housing market crash as of today 11/7/2021? Do you predict it will happen in 2022?
Veronica says
I have no idea. Housing is too expensive but it may not collapse any time soon.
Anonymous says
I predict market crash Oct.2022.Shiller P/E will surpass 50 with all the extra money floating around.40-60 percent drop due to the entire monetary system defaulting.
Veronica says
Come back in 10/2022 and let’s discuss!
Anonymous says
Oct 2022
Will says
Thanks for the article. Very helpful! So here‘s my question – I’m investing in the Stock market for the first time. My strategy is definitely long term (I’m 37). If I plan to hold stocks for the next 20 years at least wouldn’t it be wise to set aside cash every month and wait for the next crash to enter at the dip and then hold long term?
Veronica says
Hi Will – thanks for writing in. I think what you are describing in theory sounds good, however, the problem is nobody could predict when the next crash will happen. For example, some people were talking in 2015 (when the stock market dipped) about setting their cash away… had they done that… they would still be waiting 7 years later. In my opinion, you could be a little cautious and set aside more cash, but to pull money out and wait for the next recession is like saying you are the fortune teller, which none of us are.
Will says
Thanks so much for your answer! I just find it feels so risky to invest at a point in time where everything seems to be overvalued – stock, crypto, housing. Then of course Corona and now inflation from supply shortages, super low interest rates and crazy gas and oil prices, along with a huge influx of private amature investors like me, powered by new apps and a lack of better investment opportunities. I don’t know what it was like in 2015, but this feels more like what you read about pre-2000 or 2008. So yeah, it could wait 7 years for a crash and then it will turn out to be more expensive to enter the market than today, but it could also crash next month. So I understand you can’t time the market, but how do you factor in how risky and appropriately priced an investment is or how probable and event like a crash is? Or at least does it make sense to invest when stocks are not overvalued? Or to invest in sectors that are more crash resistant, like infrastructure and gold?
Veronica says
You are asking the billion dollar question. Everyone has a different opinion, some say to keep doing the same thing and ignore timing the market while others, like Ray Dalio, will tell you to invest in infrastructure or real estate or commodities that are real assets since they believe financial assets are about to crash in 2022. Nobody knows for sure. Just don’t put all of your eggs in one basket.
Artie Whitefox says
God’s kind reasonable mind in our mind will not use cash, hence will not have what we see as a crash. Satan wants god’s image to be fearful, like that being regarding that beings ultimate end in God’s light, that shines from Jesus. God’s image giving to god’s image what is God’s will stop that worry ,and world hunger, and make people to be ecstatically happy being able to have what they want merely by asking for whatever. That is what we do when we pick fruit from a tree.
Veronica says
Thanks
Anonymous says
SIP means …investing every month at current price