Don't Miss the Stock Market Boom By Fearing the Crash.
It is absolutely normal to worry about the next stock market crash. You probably have a portion of your life savings wrapped up in your retirement fund, which is tied to the success of the stock market.
Should You Fear The Next Crash?
Except for the perma-bears out there, no one loves a stock market crash. But the fact is Governments, Central Banks and Economists are getting better at responding to existential financial disasters.
The recovery from the Corona crash has been nothing short of impressive. This crash was the most violent and volatile of all crashes, yet has been handled very well. It had the potential to be as big as 2000 and 2008, yet the response curbed the brunt of the disaster.
How Long Until Stock Markets Recover From A Crash?
If we analyze the 6 major US stock market crashes of the last 100 years, we see that the average peak loss was 57%. Also, the average duration of the recovery is 9.8 years. This can be somewhat misleading, though. The 1929 crash was exceptional in its size and duration. Additionally, governments and central banks have realized that they can manage inflation and stimulate the economy to speed economic and stock market crash recovery.
Over the last 20 years, we have had 3 major crashes, with an average loss of 62%, but with an average recovery time of 7 years. the last 2 crashes lasted only 5 years and under 1 year.
The History Of Crashes
Year Loss Years Recovery
1929 -89% 23
1973 -46% 10
1987 -35% 2
2000 -83% 16
2008 -54% 5
2020 -38% 1
Average -57% 9.8
Will There Be Another Crash?
Yes, there will be another crash, probably due to a needed correction of the current boom we are in.
What Will Cause the Next Crash?
Historically speaking, my analysis shows that the most common causes of crashes are:
- Equity Bubbles (1929,1987,2000)
- Easy Access to Credit (1929,1987,2000)
- Poor Institutional Risk Management (1929,1987,2000,2008)
- Asset Bubbles (2008)
Right now we are experiencing an Equity Bubble, Asset Bubble (Property), and Easy Access to Credit. The Crypto Bubble is also a major risk.
When Will Be the Next Crash?
My in-depth business cycle analysis indicates a high probability of a correction in 2022. This also coincides with potential increases in interest rates to begin cooling off the current boom.
Don't Be Crippled By Fear.
The markets are booming, now is not the time to be crippled by fear. If you miss out on these gains in the good times, what do you have to look forward to in the bad times?
Crashes do not happen overnight, they usually take 2 to 3 years to fully hit bottom, so you will have time to react. Just enjoy the ride for now.
Should You Fear The Next Crash?
Except for the perma-bears out there, no one loves a stock market crash. But the fact is Governments, Central Banks and Economists are getting better at responding to existential financial disasters.
The recovery from the Corona crash has been nothing short of impressive. This crash was the most violent and volatile of all crashes, yet has been handled very well. It had the potential to be as big as 2000 and 2008, yet the response curbed the brunt of the disaster.
How Long Until Stock Markets Recover From A Crash?
If we analyze the 6 major US stock market crashes of the last 100 years, we see that the average peak loss was 57%. Also, the average duration of the recovery is 9.8 years. This can be somewhat misleading, though. The 1929 crash was exceptional in its size and duration. Additionally, governments and central banks have realized that they can manage inflation and stimulate the economy to speed economic and stock market crash recovery.
Over the last 20 years, we have had 3 major crashes, with an average loss of 62%, but with an average recovery time of 7 years. the last 2 crashes lasted only 5 years and under 1 year.
The History Of Crashes
Year Loss Years Recovery
1929 -89% 23
1973 -46% 10
1987 -35% 2
2000 -83% 16
2008 -54% 5
2020 -38% 1
Average -57% 9.8
Will There Be Another Crash?
Yes, there will be another crash, probably due to a needed correction of the current boom we are in.
What Will Cause the Next Crash?
Historically speaking, my analysis shows that the most common causes of crashes are:
- Equity Bubbles (1929,1987,2000)
- Easy Access to Credit (1929,1987,2000)
- Poor Institutional Risk Management (1929,1987,2000,2008)
- Asset Bubbles (2008)
Right now we are experiencing an Equity Bubble, Asset Bubble (Property), and Easy Access to Credit. The Crypto Bubble is also a major risk.
When Will Be the Next Crash?
My in-depth business cycle analysis indicates a high probability of a correction in 2022. This also coincides with potential increases in interest rates to begin cooling off the current boom.
Don't Be Crippled By Fear.
The markets are booming, now is not the time to be crippled by fear. If you miss out on these gains in the good times, what do you have to look forward to in the bad times?
Crashes do not happen overnight, they usually take 2 to 3 years to fully hit bottom, so you will have time to react. Just enjoy the ride for now.
Barry D. Moore CFTe Financial Technician
12 Proven Winning Chart Patterns
www.liberatedstocktrader.com/chart-patterns-reliable-profitable/
MOSES Beat The Market with TradingView:
www.liberatedstocktrader.com/moses
12 Proven Winning Chart Patterns
www.liberatedstocktrader.com/chart-patterns-reliable-profitable/
MOSES Beat The Market with TradingView:
www.liberatedstocktrader.com/moses
