Crash Ahead [Warns this Expert]
Last Friday, I briefed you about the potential “worst-case” scenario if we enter a full blown trade war with China.
Namely, a 20% bear market decline for U.S. stocks.
A steep decline like this in the stock market is usually accompanied by a slumping economy, and sometimes a full-blown recession.
The U.S. hasn’t suffered one since the Great Recession of 2007-2008. It can be argued we’re certainly overdue for one.
And some Wall Street experts think the next slump could come a lot sooner than most thought.
Two years from now to be precise.
Ray Dalio, founder of Bridgewater Associates and one of the smartest (and richest) guys around, says the next financial crisis could be worse than 2008!
Dalio correctly predicted the subprime-fueled crisis back in 2007, and he believes the economy may already be living on borrowed time.
Dalio cites rising interest rates as a possible trigger.
“The probability of a recession prior to the next presidential election (in 2020) would be relatively high, 70% or something like that,” Dalio said last week. He then went on to say the economy is in a “pre-bubble stage” and could soon be “followed by a bust.”
If that isn’t gloomy enough for you, there are even more dire forecasts to support Dalio’s views.
In recent weeks market strategists at two of Wall Street’s top firms have published reports warning of growing risks.
Source: Bloomberg, Goldman Sachs, Shiller, Haver Datastream
Goldman Sachs is especially bearish.
It’s proprietary “Bear Market Risk Indicator,” as you can see in the chart above, is up to 67%.
The last two times this indicator reached such high-risk levels were before the dot.com bubble burst in 2000 and the subprime bubble burst in 2008.
Meanwhile, Citigroup chimed in their own gloom and doom forecast, stating the odds of a market correction within the next three months are 50/50.
Goldman additionally cautioned investors too stating:
“Bear markets are inevitable: the question is not if, but rather when the next one will occur.”
Which is why tomorrow I’ll show you exactly how to prepare your investments to ride out the next bear market, whether it comes sooner or later.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch
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