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written by reader Market crash??

By Anonymous Questions, September 20, 2015

I’ve been getting e-mails saying that a market crash is imminent, that stocks, bonds and cash will be affected, and that if I subscribe I can ’ride it out and possibly even make a profit’. I just want to know if I should listen or not — my inheritance is riding on it. All I want to do is invest some and bank rhe rest, but if I’m going to be poor, no matter what I had, I won’t be able to.

This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.

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Patricia
6 years ago

The way to handle emails claiming that stocks, bonds, and cash will crash all at once is to “unsubscribe.” I suggest that you start reading some books on financial history, and find out how people have best preserved their wealth through economic disasters of all sorts. The answers will become clear to you. One of the best suggestions (which I’m hearing more frequently from various sources – try watching Bloomberg for a couple days in a row lately) is to keep a substantial chunk of your assets in cash right now so that whatever happens you have the flexibility to respond, to jump in sweep up bargains in stocks or real estate or whatever best appeals to you as a long term investment, depending on what crashes when. The problems with cash/currencies, though very real, will probably take a much longer time to play out.

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J Jay
J Jay
6 years ago
Reply to  Patricia

Thanks for your comments / thoughts on this. I too have seen much of the “imminent crash” columns, articles and advertising on this subject. (To the original poster, also keep in mind, that many of these also come in the form of “Advertorials”, which are designed to get YOUR $ in exchange for *their* information on how to side-step it!) Patricia, just wondering if you have any favorite books that you would recommend? Thanks!

Patricia
6 years ago
Reply to  J Jay

“This Time Is Different – Eight Centuries of Financial Folly”
by Carmen M. Reinhart & Kenneth S. Rogoff

“Manias, Panics, and Crashes – A History of Financial Crisis”
by Charles P. Kindleberger & Robert Z. Aliber

I also suggest “The Ascent of Money” by Niall Ferguson because it’s a great overview, and understanding how limited people’s financing options were before banking, bonds, and stocks were created is important. Those financial innovations sped up mankind’s economic progress to a degree we can’t really appreciate in modern times – we take credit for granted. Just because it can be so overdone and corrupted doesn’t make credit a bad thing.

And don’t forget “Dave Barry’s Money Secrets” by Dave Barry. He does a fine job lampooning those corruptors, and helps us not be so deadly serious about all this.
It’s only money!

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hendrixnuzzles
6 years ago

Hi JJ,
I have found myself in agreement with Patricia on many issues and agree with her answer here also. I do subscribe to a few newsletters, but for the most part they are a waste of money and you will wind up following the ones that you agree with. Stock Gumshoe is better.

Don’t be in anything that makes you nervous and keep plenty of cash. My suggestion is to nibble a little bit with things you find that you believe in. Do small positions that won’t make you lose your equilibrium if they go against you.

My opinion is that the investment landscape is really, really treacherous right now.

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hendrixnuzzles
6 years ago

Hi JJ,
I have found myself in agreement with Patricia on many issues and agree with her answer here also. I do subscribe to a few newsletters, but for the most part they are a waste of money and you will just wind up following the ones that you agree with.

Don’t be in anything that makes you nervous and keep plenty of cash. My suggestion is to nibble a little bit with things you find that you believe in. Do small positions that won’t make you lose your equilibrium if they go against you. Surf around Stock Gumshoe, you’ll get ideas that won’t be accompanied by strenuous efforts to sell you another subscription.

My opinion is that the investment landscape is really, really treacherous right now.

For your reading enjoyment I suggest The Big Rest, by Martin Middlekoop and
The Downfall of Money, by Frederick Taylor.

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hendrixnuzzles
6 years ago
Reply to  hendrixnuzzles

PS…the majority of my assets are outside of the stock and bond market. So my losses
may sting but they are not going to be ruinous.

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hendrixnuzzles
6 years ago

Everything cannot crash at the same time because commodities have already crashed and the stock, bond, dollar, and real estate markets are still levitated.

Those markets may all crash fairly simultaneously, but no one knows for sure and they certainly do not know when.

Those remaining asset bubbles are highly dependent on interest rates, hence the desperate and unnatural adamancy of the governments to keep rates low and “stimulate”. These policies must eventually erode the value of the dollar, but as Patricia pointed out, we will have a little more time to see the dollar crashing than we will the stock or bond markets.

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hendrixnuzzles
6 years ago
Reply to  hendrixnuzzles

Wait a second…the stock market is sort of having a train wreck as we speak.
That would leave bonds, USD, and real estate as the holdouts.

There are two other prominent bubbles. One is the high cost of educational services; and the other is the high societal costs of health and medical care. These will be the very last to go; and I am a biotech bull thanks to the guidance of Dr Kss.

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