When people think market will crash, it will not crash

When people think market will crash, it will not crash.

When no one thinks that the market will crash, it will unexpectedly crash (Ian Low)

Is there a 10 year cycle to market crashes?

 

Equity high         Property high              Crash

1985                          1986                          1987

1995                          1996                          1997

2006                         2007                         2008

2017?                        2018?                       2019?

 

A 10 to 12 year cycle is more likely.

Most people are predicting crash  in 2018. I really dont know, but if i were to speculate, it may be in 2019 or even 2020. In the meantime, for the next 2 years, it may probably be the best time to trade stocks upwards. Property stocks are now on the move up too. Here are my reasons:

  • No over-exuberance yet. Investors are thinking crash is coming soon
  • Investors are flooded with money and nowhere to invest
  • Fed wants to increase interest rate to 3%. Now 1.25%. At the current rate 0.25% increase every 2 FOMC meetings, it will take another 2 years before it reaches 3%
  • As the Fed increase the rates in next 2 years, US Treasury Bonds will be sold off gradually. Who will be the beneficiaries of these smart money? Very likely to Asian equities.

Along the way, there may be fears and political risks that cause markets to fall. For me, every dip will be an opportunity to buy.