Are You Prepared for a Major Market Crash?
The market has been making me uncomfortable. Perhaps “more uncomfortable than usual” is a better description. I’m feeling more like a gambler than an investor. By that I mean that my feelings about positive market returns are closer to “hope” than they are expectations. That’s not good. Feelings like I have about the market are more akin to being a lottery player or speculator.
At this point, my concerns have shifted more toward damage control than fine tuning for better returns. I, like some others with more expertise than I have, am concerned about another market crash.
Imagine if you were heavily invested in the Euro now. It has fallen to four year lows. It’s near term prospects are not good.
How can a damaged Euro affect us here in the U.S.? For an economist’s answer to that question, read this piece on the Eurozone Blues by Peter Navarro. If you are a serious investor, read the entire piece. If you are a lazy “hope for the best” investor, read this paragraph from the article:
It is easier to paint a bearish global scenario from the euro collapse than a bullish one. The bearish scenario is this: Europe stagnates as “Le Tarpe” fails because of political pressures that were not present in the U.S., i.e., while the U.S. could make demands on Citi and AIG et al, the Eurozone bigwigs can’t bend Greece and Portugal and Spain to their will. China implodes on a combination of collapsing real estate and stock market bubbles coupled with a fall in exports to the Europe. The U.S. continues to be leached by Chinese mercantilism while it loses its export growth in Europe while internally states like California and Illinois undertake contractionary measures that ripple across the nation.
What about the rallies we have experienced, you might ask?
Have you heard the term “sucker’s rally?”
Read this article – ‘Major Crash’ Likely If Stocks Break May 7 Lows – and then ask yourself:
Am I prepared for a major crash?
You had better be prepared.