Yes, I know that the stock market is a speculative market. I am not an economist, I don’t study economic issues or analyze the history of capitalism. I don’t know what will happen when we reach this point in our history.
Nevertheless, I do know how I would react if the market crashed. I’d be one of the first out of my home to close the blinds, get out the lawnmower and move out of town. How dare the markets crash, I’d think, and I know I’m not alone.
So, what does the future hold for investors, for traders, for stocks, for dollar values? Will the market crash? Is it going to happen in the next year?
Well, the bear market is a misnomer. It simply means that the value of stocks is falling for some reason, and it will end soon. Maybe, in the next year.
If you buy a stock today and you’re expecting double digit annual returns, that’s simply not going to happen. And I don’t care if you’re an enthusiastic do-it-yourselfer, a trader or someone who likes watching the markets. There are far more people in those two categories than I would have thought.
Those who did get out and get away should put their faith in the stock market. It has never had a history of crashing and so it has little history to worry about.
The media have created a new definition of a recession. Many see it as a time when a company is cutting expenses, laying off employees and slashing staff bonuses. No, it is not. A recession is when profits fall and employment levels decline for no reason other than the business was unable to increase revenue.
So will the stock market crash? Of course it will. There will be a time when there will be a stock market crash, but it won’t be because of anything the market has done.
Now, remember, the market is illiquid, which means that there is a huge amount of trading that takes place in less than a single day. That means there will be a massive amount of selling that will also take place that will depress stock prices. No one wants to sell at a loss, but some will.
That means that there will be a big illiquid market for at least three months. That is where you can really see the impact on stock prices.
If you’ve been in the market for five years or more, you’ll find that things will remain fairly stable until the markets crash, and then you’ll want to get out fast. If you’ve been in the market for three years or less, the time for action will arrive and you’ll want to act now.