Editor: Crass Cash
The next stock market crash is more a matter of when rather than if. Crashes always happen. It's part of the nature of human psychology and its interaction with capitalism. So if it's going to happen, when will it be?
Bond prices and stock prices usually move in opposites of each other. This is because both markets are liquid and the people who invest in them often move back and forth between the two. As a result one moves up and the other moves down.
I think the bond market is more overvalued than the stock market. With that said the Federal Reserve is most likely to start raising interest rates towards the end of this year. When they do it probably won't cause a crash but it could cause a 10-20% correction. The crash I'm referring to would be 50% or more.
As rates increase this is going to cause the bond bubble to crash. Investors will flee into stocks since it's the only other option. This will goose the stock market into nose bleed section, since it's already expensive, causing an even greater bubble in the stock market. Eventually an inverted yield curve will cause a recession and the stock market will crash.
So when will all of this happen? Well it actually takes years for all of this to play out. It depends heavily on what the fed does. With that said I think it'll happen before the end of the decade and most likely around the 3-4 year mark.
As circumstances change, so will my opinion.
Disclaimer: Take this with a grain of salt. I'm not a lawyer, CPA, or financial adviser.
Bond prices and stock prices usually move in opposites of each other. This is because both markets are liquid and the people who invest in them often move back and forth between the two. As a result one moves up and the other moves down.
I think the bond market is more overvalued than the stock market. With that said the Federal Reserve is most likely to start raising interest rates towards the end of this year. When they do it probably won't cause a crash but it could cause a 10-20% correction. The crash I'm referring to would be 50% or more.
As rates increase this is going to cause the bond bubble to crash. Investors will flee into stocks since it's the only other option. This will goose the stock market into nose bleed section, since it's already expensive, causing an even greater bubble in the stock market. Eventually an inverted yield curve will cause a recession and the stock market will crash.
So when will all of this happen? Well it actually takes years for all of this to play out. It depends heavily on what the fed does. With that said I think it'll happen before the end of the decade and most likely around the 3-4 year mark.
As circumstances change, so will my opinion.
Disclaimer: Take this with a grain of salt. I'm not a lawyer, CPA, or financial adviser.
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