There’s been some talk of late of an impending stock market crash. As an avid follower of the stock market I have to say I agree. I think not only is it imminent but is long overdue. The longer the crash takes to happen, the more severe it will be. There are a couple of things you need to consider though:
First up I’m not a trained financial advisor, so what you’re reading here is NOT financial advice but just my thoughts regarding what could potentially happen.
The stock market has basically been on an upward trajectory since the GFC fallout of 2008. There have been some 10%-20% corrections in the time since then, but not anything like the 40% drops that one would call a crash.
I’m seeing many of the “experts” come out and say the same thing. Here’s a link to Robert Kiyosaki and Warren Buffet hinting very strongly that the crash is coming and coming soon. Kiyosaki thinks the coming crash could be the worst we’ve ever seen. Buffets rationalisation for this crash is interesting saying the stocks are valued at 184% of what they are worth in relation to PE ratios. This is basically the level at which a crash is imminent.
There’s a couple of things that I think might stop the crash or lessen the severity of the crash which is the fact that basically everything is overvalued. You can sell off your shares or holdings, but where would you put the money after that? Gold is high, Bonds pay f–k all, and Real Estate is also overvalued. Or if the predictions are right, it could mean everything (except maybe gold) will be taking a huge hit. Only thing I can think of is putting money into oil at the moment.
The stock crash predictions have been going on for a while now, I’ve been hearing this for the last 2 years at least. In some ways, if you predict a crash long enough it will happen anyway. As they say even a broken clock is right twice a day.
I guess the most important thing is how can one cash in on this? Well, the simplest answer is to wait for the crash and buy stocks when they are cheap. In a crash there are still great companies that are undervalued. You’d have to do some research but there will be bargains out there. Talk to your bank about how you can open a share account. Another Idea would be again to wait for the crash and put your super into the stock market when you’re satisfied the market has bottomed out. Think about this seriously though, don’t put money you can’t afford to loose or keep in the market for a while before taking out. I believe the crash is coming and that’s what I’ll be doing, but bear in mind it can take the market years to recover. If you time this right, this can be life changing money for those that take a chance.
David Brady’s predictions.
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