I’ve been following the stock market now for roughly 5 years and in my opinion everything indicates to a recession in the upcoming 1-2 years. I’ll try to explain you why in just a second, but first a few words about me.
This idea should be taken with a pinch of salt. I’m by no means a professional and this is purely speculation. I’m writing this to clear my own thoughts, and I hope I’ll be able to reflect on it in a couple years time.
Why do I excpect a recession in the near future?
1. The S&P 500 just hit a new record of 3,453 days of growth, making it the longest bull market in history. The SPX is also now producing new all time highs. All cycles come to an end.
2. The amount of loans are record high in almost all sectors and the default rates are rising, especially with student loans. I have seen 60 month, 0% interest-rate, payment ”solutions” being offered for sofas. Yeah you heard right, SOFAS!
3. Interest rates are rising. Often when the Central Banks tighten up, the economy takes a tumble.
4. The growth in the stock market is largely fueled by Central Bank money printing and buying of stocks with that money. This is in my opinion unpatriotic and borderline criminal.
5. I’ve heard that every time new skycrapers are popping up like mushrooms in the fall, you know the market cycle is about to end. This is atleast the case in my country, Finland, but I don’t know about USA. Maybe someone of you could enlighten me about the situation there :)
6. A bunch of indicators that have predicted crashes before are now flashing red. I won’t even try to compile them here.
7. CNBC Fast Money are euphoric and have a positive outlook on the markets. One of the best counterindicators that there is, as presented here a couple days back with BTC.
I could go on but I think this is enough for now. I personally exited the stock market in November 2017 and my portfolio is now mostly cash, but I’m slowly dollar cost avereging into cryptocurrencies. And as a final note, the best investment you can make is in yourself. Read books and seek knowledge, listen to others with an open mind and be ready to change your own opinions in the light of new information.
Best wishes, Niklas
This idea should be taken with a pinch of salt. I’m by no means a professional and this is purely speculation. I’m writing this to clear my own thoughts, and I hope I’ll be able to reflect on it in a couple years time.
Why do I excpect a recession in the near future?
1. The S&P 500 just hit a new record of 3,453 days of growth, making it the longest bull market in history. The SPX is also now producing new all time highs. All cycles come to an end.
2. The amount of loans are record high in almost all sectors and the default rates are rising, especially with student loans. I have seen 60 month, 0% interest-rate, payment ”solutions” being offered for sofas. Yeah you heard right, SOFAS!
3. Interest rates are rising. Often when the Central Banks tighten up, the economy takes a tumble.
4. The growth in the stock market is largely fueled by Central Bank money printing and buying of stocks with that money. This is in my opinion unpatriotic and borderline criminal.
5. I’ve heard that every time new skycrapers are popping up like mushrooms in the fall, you know the market cycle is about to end. This is atleast the case in my country, Finland, but I don’t know about USA. Maybe someone of you could enlighten me about the situation there :)
6. A bunch of indicators that have predicted crashes before are now flashing red. I won’t even try to compile them here.
7. CNBC Fast Money are euphoric and have a positive outlook on the markets. One of the best counterindicators that there is, as presented here a couple days back with BTC.
I could go on but I think this is enough for now. I personally exited the stock market in November 2017 and my portfolio is now mostly cash, but I’m slowly dollar cost avereging into cryptocurrencies. And as a final note, the best investment you can make is in yourself. Read books and seek knowledge, listen to others with an open mind and be ready to change your own opinions in the light of new information.
Best wishes, Niklas