There are three reasons the stock market is so high. Low interest rates, low interest rates, and low interest rates.

Becuase interest rates are so low, bonds and other altenatives to stocks are not attractive.

I do think the chances of a 10 to 20 per cent market drop are high.

Once there is any substantial change that points to higher rates, I expect a lot of selling will occur in a game of trying to get out before high profits are lost.

If this sell off does occur, then everything after that will hinge on what happens with interest rates.

I quit trying to figure the stock market even though I have studied it starting in high school and through my MBA.

I didn't follow through on my gut reads that would have saved me a fortune by cashing out and the one time I did follow which was Nov 2020, I missed out on the rise that happened.

I've heard "don't time the market" because it will continue to rise over the long term. But that's not going to help much if you're clobbered and you're not going to live forever to see the market recover.

I am thankful my portfolio has doubled in the last 4 years. I'm getting comfortable with the idea that the market could drop by 20% at any given time. Supposedly, my money management firm (Fisher Investments) which manages 50% of my portfolio supposedly has the discipline and metrics to avoid the worst of any bear market. They don't try to sidestep any correction and they say corrections are only short term.

Corrections can take 10-15 years to work out, so it’s something to keep in mind.

On the plus side of increased interest rates, that should take down some of the hedge funds which have locked up retail space, and are choking the life out of Miami Beach, etc

quote:

Originally posted by Aglifter:
Corrections can take 10-15 years to work out, so it’s something to keep in mind.

On the plus side of increased interest rates, that should take down some of the hedge funds which have locked up retail space, and are choking the life out of Miami Beach, etc

You may be talking about bear markets possibly. Corrections do not last 10-15 years.

"A stock market correction is a brief dip of 10%-20% in the market or individual stock that occurs to correct artificially inflated stock prices and unsustainable growth. They typically last a few months, although some last only a few days."

What is a stock market correction?

For bear markets, supposedly the worst of bear markets happen in the bottom two thirds historically speaking according to Fisher Investments who's supposedly done all these number crunching. So if they take you into a defensive position sometime during the first third, they would have spared you the brunt. Additionally, again based on history, they wait no more than 18 months before going back into stocks as supposedly most of the gains in a bull market happen in the first third and last third of the cycle.

Mrs culpa for using terms incorrectly. I was referring to how long the S&P 500 has taken to recover

quote:

Originally posted by Aglifter:
Mrs culpa for using terms incorrectly.

Isn't Mrs. Culpa the lady in 204 with all those cats?

Dang fat fingers, small phone and autocorrect!

quote:

Originally posted by parabellum:

quote:

Originally posted by L90814:
According to some people smarter than I...

I wouldn't be so sure of that.

They're only smarter than you because they get to skim a few points off your gains because you think they're smarter than you.

I believe a crash is coming, especially under biden.


Markets are irrational until they aren't. Anyone with an IQ above room temperature knows that the .gov gravy train is going to run out of money to pay people to do nothing.

Leverage has added jetfuel to the market's fire (the most in history) and when positions start getting liquidated we're going to witness a crash unlike any other.

Bulls make money. Bears make money. Pigs get slaughtered. A bear market is long overdue.

The most money I've ever made in the market over the decades, has been during and after extreme declines. Last March/April was a perfect example. The energy stocks were amazing bargains. As was Boeing. Same with the market drops in 2001, and 2008/early 2009. I got lucky and bought the exact day the S&P hit the low in March of 2009---I remember because the low was 666 that day (March 6). Interesting coincidence, I thought. Just have to be ready to move fast and take full advantage when those gifts look you in the eye, and you have to have cash in reserve to do that. Looking forward to the next one. We'll have one at some point--perhaps when the Fed gets serious about withdrawing liquidity (tapering). One indicator I use is the VIX. Look at that chart over 20 years. When it occasionally gets over 50 in a panic selloff, the market is a buy every time. Overlay a monthly chart of the VIX with the S&P, and you'll see what I mean.

April 18, 2023
The Stock Market Crash Will Occur Right After the Debt Ceiling Vote

By Jesse Richman and Howard Richman

On April 26, 2021, we predicted the current inflation before it began. Now we are predicting an upcoming stock market crash, and we even know the date that it will take place. Interviewer Margaret Brennan and European Central Bank President Christine LaGarde gave the date away during their conversation on "Face the Nation" on April 16:

MARGARET BRENNAN: I want to ask you about the US. And it’s not a political question, it’s an economic one. But there are predictions that the US could default in its national debt as soon as June, some say September, and we have a political standoff in this country, virtually no negotiation happening on how to resolve this. Does that undermine your confidence in the United States? And what message does that send to the world?

MADAME LAGARDE: I have huge confidence in the United States. You know, ever since my year in this country, and this city in ’73, ’74, I have had confidence in this country and I just cannot believe that they would let such a major, major disaster happen of the United States defaulting on its debt….

The Democrats have scheduled the stock market crash to take place the day that House Republicans vote to not raise the debt ceiling. Right afterwards, the Biden Administration will declare a temporary “default” on the U.S. Debt, the stock market and bond market will immediately crash, and Republicans will be blamed.

Conservative commentator Lou Dobbs has been advising Republicans to vote to raise the debt ceiling. In an interview with Steve Bannon on his March 21 podcast, Bannon and Dobbs both agreed that an economic crash was coming, but they didn’t know when it would occur. Bannon predicted that it would occur before the debt ceiling vote. Dobbs simply argued that refusing to vote for the debt ceiling would be a huge political mistake, one that could deal a “fatal blow to the Republican Party because Democrats will beat them to death.”

more...

https://www.americanthinker.co...bt_ceiling_vote.html

^^^ RogueJSK, I know. Predictions are impossible. I'm not predicting... but some are.

It is a dangerous time though. I think the Dems WANT a default... to blame on Republicans.

Why it matters: Unlike January's speaker election, in which GOP unity and McCarthy's personal ambitions were the main assets at stake, the House's vote "in the coming weeks" could determine whether the U.S. economy averts a catastrophic default.

That outcome will depend on McCarthy's ability to unite the fractious Republican conference around a plan — the full details of which have not been unveiled — to cut spending and lift the debt ceiling into next year.
Failure to do so could cost McCarthy the job he spent four days, 15 ballots and massive political capital attempting to secure — and hand Democrats new leverage to pass a "clean" debt ceiling hike.

Driving the news: Addressing the New York Stock Exchange on Monday, McCarthy said the House would vote on a bill to hike the debt ceiling, "save taxpayers trillions of dollars, make us less dependent on China, and curb high inflation — all without touching Social Security or Medicare."

The Biden administration and top Democrats, who have refused to negotiate over spending cuts as long as the GOP ties them to raising the debt ceiling, quickly attacked McCarthy over the lack of details in his plan.

"I’ll be blunt: If Speaker McCarthy continues in this direction, we are headed toward a default," warned Senate Majority Leader Chuck Schumer (D-N.Y.).

State of play: McCarthy dodged when asked after the speech if his plan actually has the support of the GOP conference, telling CNBC: "I think I have the support of America because I'll get the party behind it."

He later told CNN that he believes Republicans have the necessary 218 votes to raise the debt ceiling.
An Axios analysis found that 16 of the 222 House Republicans have never voted to raise the debt ceiling — even under former President Trump.

Between the lines: McCarthy's position as speaker has been inextricably tied to the debt-ceiling fight since Day 1, after right-wing rebels forced him to agree to only hike the debt ceiling only if it were paired with spending cuts.

The Freedom Caucus, which is comprised of many of those rebels, has sought to assert control over the negotiations by releasing its own aggressive preconditions for raising the debt ceiling.

"The fight’s just begun — the speaker’s fight was a preview," Freedom Caucus member Rep. Chip Roy (R-Texas) told donors last week. "If you think it was hot then, the debt-ceiling fight is going to get a lot hotter."

Behind the scenes: One of the major unresolved sticking points within the House GOP is whether to punt the debt limit by a year or past the 2024 election.

Other tensions include whether to repeal Biden administration policies from the Inflation Reduction Act and how far to push on certain cuts, especially as they relate to defense spending.

https://www.axios.com/2023/04/...ote-speaker-election

The market is waaaaaay over due for a major correction imho. With things such as they are these days. Seem's like it could happen in a big way. A guess, like everyone else.

quote:

Originally posted by RogueJSK:

quote:

Originally posted by Aglifter:
Mrs culpa for using terms incorrectly.

Isn't Mrs. Culpa the lady in 204 with all those cats?

That's her. Mrs. Mia Culpa.

quote:

Originally posted by bubbatime:

There has to be a correction on the horizon. Or worse. Right?

If it was that easy to time the market and predict the future . . .

But if anyone is sure of a big downward correction, you know how to make a ton of money.

Of course, this is a two year old thread, and no correction yet, even though some are still predicting one.

quote:

Originally posted by BBMW:
Where's JAllen when we need him? He'd be all over this.

Yeah, but we know what he'd say about trying to predict the market. He was a value investor. Pick your investments, don't play market timing roulette.

quote:

Of course, this is a two year old thread, and no correction yet, even though some are still predicting one.

Actually, there has been...
People forget that 2022 was actually a pretty good correction:

Through the first quarter of 2023, the S&P 500 is up about 7%. Considering the S&P was down 19.4% for 2022, the stock market is experiencing a robust rebound in the first three months of the year.

quote:

Originally posted by chellim1:

quote:

Of course, this is a two year old thread, and no correction yet, even though some are still predicting one.

Actually, there has been...
People forget that 2022 was actually a pretty good correction:

Forget? Who besides jhe888 is not calling 2022 a correction?

quote:

Originally posted by jhe888:

quote:

Originally posted by BBMW:
Where's JAllen when we need him? He'd be all over this.

Yeah, but we know what he'd say about trying to predict the market. He was a value investor. Pick your investments, don't play market timing roulette.

But he’d say it in a way that would be eminently quotable. I miss him.