What say you financial wizards? I saw this article today and thought I'd share. To me, the gains the markets have seen in the past year have seemed insane and I figured there'd be a "reset" before now. But I know nothing, lol.
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Stocks have been in the midst of a long bull market, but there are signs that it's finally going to run out of steam and will inevitably be followed by a bear market and a difficult "reset," according to Chris Vermeulen,CIO of Technical Traders.

In an interview with Bloomberg, the investment chief pointed to the recent run-up in defensive assets, like precious metals, energy stocks, and industrial stocks. Those areas all typically do well in the late stage of a bull market, which is inevitably followed by a bear market or a "financial reset," Vermeulen said.

Investors are likely heading into another bear market, similar to the ones that followed the dot-com bubble and the 2008 financial crisis, he predicted. That could end up sparking painful stock losses for investors, with people seeing their wealth decline as much as 30%-50% over the next year, he warned.

"I think we're coming into a major market top, more or less a financial reset," Vermeulen said Tuesday. "It's short-term, temporarily painful. But we need markets to reset. We need regular pullbacks and corrections in order for the market to keep going up."

That reset could also come with a recession, Vermeulen said, with industrial stocks in particular signaling a slowdown for the economy. While the sector has done well in recent months, buyers of industrial goods typically upgrade their equipment at the end of an economic growth cycle, due to "huge delays" between slowing business and orders for new machinery.

"They don't realize we're coming to the end of a growth cycle, and the music is about to stop," Vermeulen said of US firms. "Industrial stocks have just continued to muscle their way higher. They're hitting all-time highs, and that is a sign that we're going to see these companies eventually start to slow down."

Investors remain concerned over a potential recession, especially as inflation has remained stubbornly elevated and the Fed looks poised to keep interest rates higher for longer. The economy has a 58% chance of tipping into recession by March of next year, per the latest estimate from the New York Fed.

There is uncertainty about who will win in November plus if for the first time in history a potus may be incarcerated. Plus-Wall Street and reality have not jive for many years.

Here is my 2¢.
For consumers and businesses, higher interest rates force prudence in borrowing decisions, increase the cost of capital, and encourage saving. For governments, rates will necessitate a reexamination of fiscal outlooks in the near term. The new reality of rising deficits and higher interest rates will elevate concerns about fiscal sustainability. And, barring a drastic productivity rebound, the chances of avoiding a recession remain low.

Higher interest rates are a welcome development, despite the expected increased volatility while the market adjusts to this new normal. For a well-diversified, long-term investor, higher rates create a solid foundation for risk-adjusted returns going forward.

I believe if we do have a recession, it will be short lived because the Fed's will do everything possible for a long term melt down (something that wasn't done in the 20's & 30's). I do believe also inflation will stay high and unemployment will be above normal with robotic advancement in the world moving forward. I will say inflation & growth in private stock accounts will be equal to one another, so a slow boring year in stock market growth.

Election year is going to be a sideways movement year in the financial world. The unsettled worries and wars started in global countries will play a huge part in a stable financial economy.

It's been a rough month in the market, but we've had a good run. In my opinion, we still have some good times ahead but it doesn't feel great.

Resets are good,,,,,we’re due

Went from talk of multiple rate cuts this year,,,1-2 rate cutes,,,,no rate cuts,,,,, now the possibility of rate increases

Lots of different issues all coming together. More crazy spending(Ukrain/Israel spending package)seizing Russian assets, flight to the usd, election, geopolitical, election,,etc

Yotetrapper,,,,,,, you can make money when the market is falling. A lot of money


Question:

If the governments can just print money? Why do we pay taxes??

"Investors are likely heading into another bear market, similar to the ones that followed the dot-com bubble and the 2008 financial crisis, he predicted."

This is not the old days pre-2000. The Federal Government and the Federal Reserve will come to rescue with a lot of printing and borrowing. Too many voters' 401k's will be affected. Most investors are probably aware of this. Not so much risk as reward these days.

In 2009 the dow was 7600 and now almost 40,000. The usa as a whole must be in great shape....

Not sure who wrote the OP’s article???

A lot of people write articles,,,,,

One guy you often see quoted is Robert Kiyosaki

He’s a total loser,,,predicted 17 of the last 2 bear markets. Lol

Doom/gloom sells

It was written by a Jennifer Sor.

https://www.msn.com/en-us/money/mar...ars-to-recover-from-cio-says/ar-BB1lNAyc

Whatever it’s gonna do, just get it over with so I have time to recover before retirement!

I don't think I'd have too much confidence in this guy's predictions.
Will we have a correction ? Certainly but when and how severe is anyone's guess.

I don't subscribe to his belief that we must go down in order to go up. That isn't even logical.

What we need is improving profits and fundamentals along with lower debt and regulation.

Check out Chris Vermeulen's "team" on his website. The chief operating officer, Ashley Mulock, has a degree in outdoor recreation & tourism. Worked previously as a reservations agent at a Ritz-Carlton hotel in Florida.

There are no registered financial professionals on the "team".

Historically we have had a correction of maybe 10% every 1.2 years on average. That makes it a pretty safe prediction when you claim we will have a correction. DUH.

With all the different negative forces aligning to create volatility, it would be surprising if the market didn't decline somewhat.
Yes some things will get hurt worse than others. Companies with no earnings, high debt, low revenues, crappy cash flow are bound to be punished.

Just don't panic. Plan your trades and trade your plan. Chaos presents opportunities.

Do whatever you need to do to sleep at night. If you believe this is the start of something major it still isn't too late to hedge. It might be expensive and unnecessary in the long run but if it makes you more comfortable then do it.

And SPJones is right You can still make a lot of money in a falling market.

As I’ve said before I’m a grain guy, and so I love volatility as that’s when some of the best profits are made.

Thank you White17 on the insight of the market. Good information. Yes Chaos presents opportunities.

Corrections are part of the investment journey and as stated above are frequent. The difference now is that 10% is a much larger figure than 30 years ago. We are still more heavily invested in securities than many advisors say we should be at our age. (76) We meet with our financial planner next week and will put together our plan and or plans for short and longer term. We have put enough in cash based to provide for our annual needs for about a decade. Now we are trying to decide how much risk we want in the remaining portion. I unlike many who wait for the dips and peaks and are good at making the right choices doing that, am a long term type investor which has suited us well to date.
The market is not nearly decoupled from the economy as the overall feeling of the people and that is a good thing, one does not make money betting on societial feelings.
Bryce

X2 Bryce

Far more money has been lost by investors trying to anticipate corrections than has been lost in all the corrections combined.

What little I have invested is in there for the long haul so I won't be making any changes to anything. Just trying to learn how the market works better and always find posts like this one to be insightful.

Commercial property drag everything down if all else fails.

Did not read all of the replies, they tended to primarily the same any way !

If you are in the stock market for real, not just a couple hundred dollars, these ups and downs are part of the process of being there to garner the use of it.

True marketizer, lol, won't be spooked by these movements they just acquaint where to move funds to an offset, and usually won't move much any way.

You don't make capital in the market with jumping around every time there seems to be a volatile situation ! It takes years to really see improvement in a portfolio, people say "no it doesn't just see all the millionaires in", well after you have large money it grows quite quickly, getting the large amounts is the growing process that hurts one's patience !!

Certain marks of caution are a standard any more, most presidential elections, un-stable war fare as is happening now with Ukraine and the middle east are always moving the market. There is the EV market and push as well !

Rates finally back to historical normal levels. We lived too long on free $ and zero rates before this stretch.

Just the fact that interest rates are up will take money out of the market along with a whole basket full of other events.

Bryce

Invest equal amounts every month in a a low cost SP 500 index fund and forget about it. Nobody can predict the market. The sooner you start the better. Even Einstein was amazed at the power of compounding interest!

I believe inflation has risen at least 20 percent since Bidon has been in office, that means stock had to rise 20 percent the last 3 years just to be worth the same.Is this ever taken into account?

Yotetrapper,,,,,not knowing your situation,,,and being a random dude on the internet,,,,, not financial advice!!

Having 2% or 5% maybe 10%??? Outside of your long holds. To take advantage of easy trades/opportunities as they come up. Can generate some serious returns over time

The DJT stock last week for example,,,,perfect example!!!!

Depending on your fees/trade even a 100$ is enough. 1000$ would be better of course. What ever your comfortable with

You don’t have too be a brilliant financial expert. Just pay attention to current events,,,seems like you do

Make the easy 20%,,,,sell/take profits. Repeat. Repeat.repeat

Add your profit’s to your long holds


Again, not financial advice

20 percent Phil?

The official rate for the last three years is

2021 4.7
2022 8.0
2023 4.1

That equals out to 16.8 percent not factoring in compounding.

It's at least double that.

The S&P 500 is up 32 percent since Jan 1 2021. Does that really matter to the average household when the less than 50 percent of households have $1000 in the bank?

The FED is in a pickle, if they lower rates they risk blowing he lid off. They should be raising.

I have a strong desire to do that. I just don't feel like I have a good enough understanding of the market yet. Once I feel I do I plan to put $1000 in a brokerage account for "mad money" to play around with and try to make some profits in the short run. But I was the reading the wallstreetbets reddit the other day and I had no clue what 95% of them were even talking about! For example I don't even know what puts, calls, stays, etc. are and if I don't even understand that I have no right gambling on the market yet.

You’re on the right path!

Options trading is advanced,,,,,don’t even go there until you understand it

Myself I don’t do options,,,to risky for me,,,,you don’t have to


If your looking too short the market/stock,,,,,there’s plenty of leveraged short etf’s

Proshares leveraged etf’s I use a lot

Problem with those types of etfs is that they decay over time,,,,, they are for short term holds only. Do not plan on holding for a period of time.


Every high flying stock/sector will have an inverse leveraged etf

Again not financial advice

Yep. Dollar cost averaging.

Wait till ya hear the term Bouncing dead Cat.... there are some others too, that I've found humorous...

Just look up what the terms mean and write it down on a piece of paper. Then study it till you know it backwards...

And, have it auto withdrawn from your paycheck. If you do that you won't even miss it AND you won't spend it, be tempted not to invest it, try to time the market, etc.

Yep. No idea what you're talking about, lol.

LOL spoken like a true biden fan. Reality is stocks trading at 70 times didvidends is make belive money. Changing the way negative factors are measured to influence the market is what drives it now. Think about it. When rates went to 5.5 the world came to an end. Market plunged. BUT when it was 6.5 and there was a RUMOR that rates would drop in 3 momths it sky rocketed. Ask yourself what actually changed? I can tell you what changed and please fact check me. Bidens rating hit all time low. TRUMP passed him in the polls. Dems went to grasping for SOMETHING they could point at.
Analyst keep saying American's are still spending. YES but the US citizens average debt quadrupled since last November. That bill will come due and look out. 2008 all over again. I don't think it will be as severe but close.

I am a biden fan?

Your out to lunch if you believe that....and missed the point I was making by light years.

But, alas.....

How did I guess that one LOL. His cult can only point at the market to say the economy is strong. Go to Kroger or any store and tell me what the inflation rate really is. They won't add food into the calculations. Let me give you couple metrics I use to know increases.
Pringles Under ANYONE not named joe biden. 1.19 can Yesterday 2.79 cents 125% INFLATION
chicken parts (pick one) ANY ONE not biden 39 -79 cents per pound. Bidens cost 2.99-3.99 depending on part. AS MUCH AS 700% inflation.
Prices may vary where you live but I buy HERE so must use prices I paid yesterday ........

I could go on but anyone with half a brain cell sees it. Well that 23 % that thinks biden is doing a good job won't ...

^so, your saying that you do not see it?

Of course it resets wouldn't want a business to pay out on its 401 paper and have to replace an employee

You guys best be taking notice of the Boss's warning about politics.


Don't continue down that path !

Rut Roe....now I see a reaction that I've used in the market ... minnow shore scramble ....

This isn't formally in the market. I made that up a while ago , observing some reactions investors have when they're being cornered or pressed into action .

Rates have not been 6.5 % since August of 2000

Don't stop him now, he is on a roll! Watch out Marty, if Biden hears you are a fan he might call you personally. LOL.

I would luv to speak with joey

Really WHITE? What planet you from. You normally have great advice given with facts to back it

The fed raised prime rates on SEPTEMBER 22 2023 to 6.25% Not sure what interest you are referring to. The up and down on mortgage rates , false GDP ( government aid and oil exports) all drive the market

If he was a woman he’d sniff his hair.

Prime rate, federal funds rate, COFI
The prime rate, as reported by The Wall Street Journal's bank survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the federal funds rate, which is set by the Federal Reserve. The COFI (11th District cost of funds index) is a widely used benchmark for adjustable-rate mortgages.

Click on the links below to find a fuller explanation of the term.

Prime rate, federal funds rate, COFIUpdated: 2024-04-16
This Week Month Ago Year Ago
Federal Discount Rate 5.5 5.5 5
Fed Funds Rate (Current target rate 5.25-5.50) 5.5 5.5 5
WSJ Prime Rate 8.5 8.5 8

Source Bankrate.com

Pretty sure White was referring to the federal funds rate, which is the one that is set by the Federal Reserve.

The discussion was not about mortgage rates or the prime rate that commercial lenders charge their best customers.

You mentioned that the market reacted to a rumor that rates would drop in three months............You said............" was a RUMOR that rates would drop in 3 momths it (the market)sky rocketed". They weren't talking about mortgage rates. The "rumors" were about the Federal Funds Rate.....that is set by the Fed and all other rates are based on that rate.

Ill say it again. The fed funds rate has not been at 6.5% or higher since August of 2000.

https://fred.stlouisfed.org/series/FEDFUNDS

"YES but the US citizens average debt quadrupled since last November."

"The total consumer debt balance increased to $17.1 trillion in 2023, up 4.4% from 2022's $16.38 trillion total. Growth in 2023 was slower than the 7% increase from 2021 to 2022. With the exception of student loan debt, almost every major category of consumer debt increased in the 12 months that concluded with Q3 2023."

Source: experian.com

Just to be clear. The Fed does not set the "prime rate". That rate is set by individual banks and is usually the Fed funds rate plus 3%. It can vary from bank to bank

Rates should have stayed at 6.5 percent.

Before I'm asked what planet I'm from, I'm referring to the Federal reserve fund rate

Ok my bad ! Guess I should have asked what rate you were referring to
My apologies

It sounds like we are near in the same position as 2008. If you remember that year, price of oil went over 100 bucks/barrel. Almost hit 150. High gas prices, and other petroleum products is what I think caused the house of cards to crumble.
We are more or less in the same position now. With Isreal and Ukraine problems and other threats to stability, oil is likely to continue up. Biden isn't helping. Just a matter of time!

We are living in a different world than 2008. The balance of power in the petroshere has shifted dramatically. The US is at or near record production levels and OPEC is mothballing production in order to keep oil prices levitating. Yes, the strategic election reserve was depleted by 50% to influence the last election, but plenty of spare capacity exists worldwide. There are plenty of wildcards but I don't think the trouble will come from the oil market.

I think 2008 was about Mortgage Backed Securities, not oil. However, you guys are telling the story.

Back in '08, the lenders were giving loans to people who had no prayer of paying it back.

2008 was about debt they couldn't afford. We fixed it by lowering rates and indebting them more.

Oil could get interesting if the dollar weakens

Won't the Fed have to lower interest rates for the dollar to weaken, which would spur inflation. From what info is out there interest rate cuts won't happen til just before the election.

Man, I'm getting old. I remember those same problems back in '75.

That’s ok!!lol

Just giving very vague ideas on how to make money on a falling market/stock/sector,,,,I actually had specific ticker symbols in the original post,,, but deleted them as it’s probably something for another time


Serious question:

Do they not cover this stuff in the course your taking??

S&P is up 70+ points right now today. Its sure to fall now that I said that.

Not necessarily. Remember the late '70s and early '80s?



In 1975, the US federal Federal government debt was 32% of GDP. We're about four times that now

Who knows what the market will do, today is a good example call it what you want but it goes up and down but long haul its up. The folks that make the predictions get it right sometimes but wrong most. The business and financial reports need to get the predictions and then review them in a year and see what percentage of the predictions held water. The folks making the perfections would not be on TV or even in the game if they knew how to predict the market right they would all be billionaires and not be on TV hawking the market.

Wait, come again? The strategic reserve was depleted by 50% to influence the last election? How so?

Not got that far yet. I've been taking prerequisite courses such as statistics, a science class, accounting, macro and microeconomics, etc. I take my first actual finance class starting next month...it's on Fintech. Then, starting in the fall, it'll be all finance classes.

Mid-terms, help keep the price of gas down. A free market capitalist would have allowed prices to remain high and let demand destruction do what it does.

Oh. I was thinking he was saying Trump did that before Biden. Wasn't even thinking about midterms.

My broker handles everything?,,,,,,,,,,lmfao

The price of oil is not a free market. Opec members collude to fix the price of crude.