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.
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