We have seen flash crashes, we have seen crashes due to once in a century event like pandemics but the extent to which stocks are getting crushed on a continuous regular basis in the US is unprecedented.
Newton’s third law (every action has an equal and opposite reaction ) is generally applicable in markets as well, when we see there are sudden crashes, the recovery too is generally quick…
But when the fall is like what we are witnessing now - It is quite painful and generally involves time and price correction.
Where do you think this bleeding end in mother of all markets and when will we be out of the woods ?
Its funny how market goes from very bullish to ‘oh god when will it stop’ in a few months. Logically, it makes sense that markets will be tough as long as inflation path is uncertain.
If this is a new bear market, then we have seen a bear market and a bull market and now another bear market within few years. In the short term perhaps we will see a bounce as things are a bit stretched, but who knows really. So far no indication that it will actually bounce. Smalls dips are getting sold.
Last time we unexpectedly got a very fast recovery, this time it does not seem likely that that will happen. So many new investors in last few years, too much buy the dips recently. Perhaps markets will test them.
For long time investors, things got cheaper and might get even cheaper, so its not so bad.
This is the first time in ~15 years, that i am no longer overweight equity. Sold off last year in batches. Most money is in trading now. So only feel trading pain
If you like gold, maybe consider sov gold bonds too as you get 2.5% returns for free along with gold returns. Have only heard about it , so double check it. Last 10 years gold has not done much, has only kept pace with USD. Maybe next 10 it will do better, good luck.
what’s interesting is once s&p 500 came back to its previous level after 2008 gold went during 2013 and that’s when gold went bearish and equity went back to bullish. But I believe that’s due to trump era money printing and QE policies. So better to buy goldbees till nifty come back to pre levels. that red arrow is where gold started bearish after 2008 bull run though it didnt fall below a certain level
Right now there’s a pressure on Fed from Democrats to be seen as doing something on inflation. As the mid term polls draw close all of sudden they’ll realise that rate hikes will lead to recession and the same Democrats will pressurise Fed to start Quantitative Easing all over again. That will be the time when global markets will rebound. This should start from August or September as the elections are due in November.