Do you remember the stock market crash of 2008?
On Monday, September 29, 2008. The Dow Jones Industrial Average fell 777.68 points in intra-day trading. Until 2018, it was the largest point drop in history. It plummeted because Congress rejected the bank bailout bill.
But this didn’t just happen out of nowhere, there was a very clear warning. On Monday, September 15, 2008, Lehman Brothers declared bankruptcy. The Dow dropped 504.48 points.
All of this, of course, was preceded by the mortgage crisis.
I remember monitoring the news closely, and on the week of September 22 there was heated discussion about the bank bailout bill. Everyone on the news was saying very clearly, “If the bank bailout bill doesn’t go through, the stock market will probably crash.”
So, that week, I took 100% of my money out of the stock market and put it in cash. And the following Monday the crash happened.
But the crash was not over. On March 5, 2009, the Dow plummeted to its bottom of 6,594.44.
Read about the crash in more detail on TheBalance.com
And I never trusted the stock market after that. I took my retirement cash and invested in 4 rental properties and other more stable investments. And my nest egg has grown consistently.
Fast forward to 2018. If you haven’t yet noticed, the market is volatile again.
According to MarketWatch:
“Stocks tumbled sharply in October, led by a selloff in technology and energy shares as investors dumped formerly highflying large-cap tech titans and crude plunged into a bear market. The drop left the Dow Jones Industrial Average DJIA, -2.21%, down 5.1% in October for its biggest monthly drop since October 2008, while a 6.9% slide by the S&P 500 was the benchmark index’s steepest monthly fall since September 2011. Stocks have lost further ground in November but remain above the October lows.”
Overall, if you’ve invested in the stock market, you’ve done very well over the past 9 years. In 2017 the market saw a growth of 25%, but in 2018 it lost 2.5%.
The stock market is at historic highs, but the question is, how long can this last? Will stocks start to inch up again or will the market decline in 2019?
I have absolutely no idea. I know virtually nothing about the stock market. And I am in no place to predict what will happen.
However, when things are going very well in the stock market, our tendency is to think the upward trend will go on forever. But that’s just wishful thinking.
Look, I have never been interested in making a killing in the stock market or with any of my investments. I just wanted to invest as intelligently as possible so that I’d have money during my retirement. So far, so good.
I haven’t made what I’d call brilliant investment decisions, but when I saw the handwriting on the wall in 2008, I abruptly changed my investment strategy. And thank goodness I did.
This morning I came across a rather compelling video by Ted Bauman. And it may or may not be completely accurate or true. However, he declares that the stock market is in for a precipitous decline. And he backs it up by some pretty convincing data.
Since seeing this video, I’ve done more research online that backs up what he’s saying (not 100%, of course). And yes, he’s selling a financial newsletter. But I have no interest in that. That’s why I’m not linking to his video.
Why am I writing this article? Well, in 2008 I wish I had shared my insight into what might happen to the stock market before it crashed. I know many people who lost 40% of their retirement savings.
So, I’m not trying to be an alarmist, but I am recommending you be informed. Do some research by reading some articles and watching some videos, and talk to your investment advisor. And try to gauge the impartiality of those sources.
The information is out there. It’s not hidden.
Some search terms you can use in Google and YouTube: 2018 or 2019 stock market crash, 2018 stock buybacks, 2018 stock market predictions, 2018 stock market bubble
Look, I’m not a big fan of doom and gloom, as you know. But I always recommend that you be informed and then take action, based on the best information you have.
Smart people research. Dumb people hope. Don’t be dumb.
This will be my final ezine for the year.
I wish you Happy Holidays, Merry Christmas and a Happy New Year.
P.S. Some people don’t like it when I stray from my expertise about marketing and talk about other topics. Oh, well, you can’t please everyone!
P.P.S. Please don’t ask me what you should do with your investments! I can’t do that legally and I have no idea. But get informed and then take action.