I disagree with the first post this thread. The chances of medium and long term pullbacks are less because of the huge fiscal and monetary stimulus. But for that same reason, the market is inflated, and when the time comes, it will pull back HARD. That may not come for awhile, but when it does, it will show you just how risky this market can still be. Just IMO.
There is NO MORE RISK in the stock market...!
- Thread starter iceman1
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And what, praytell, are your definitions of a medium and long-term pullback, stout yeoman?
Oh, I do not really know, I have not studied the numbers. But how many 10% or 20% pullbacks have we had in the past few years? One because of COVID, obviously, but how many others? I bet we have had far fewer on average than in prior years. Because, no matter the pullback, the government will be pumping in money, both fiscally and monetarily. So that limits the downside a good bit. UNTIL that stops. Or, realistically, until people SEE that it is about to stop in the foreseeable future. Then, LOOK OUT BELOW, you'll see 2008 type risk, maybe even worse. All just IMO, don't hold me to any of that or get mad at me haha.
Well, the 7% pull back last month of 1000 points in NQ would have been a 10% pullback from just a couple years ago, which is the classical definition of a correction.
We don't need the classical definitions to define a medium or long-term pullback. The higher they go, they harder they fall when the time comes.
The point being, all that financial stimulus did not prevent September from happening. And it will not prevent the next major pullback.
One of the best movies ever made about the financial world, besides The Big Short.
Really doesn't matter how and/or when it will end, what matters is how well you are prepared when and if it ends. Everything ends eventually, but what's important is whether you will be left standing after it all ends and how well you will be standing. That's what you need to worry about the most; how securely you are buckled up for the fall.
I never try to time the market. I just make sure my seatbelt works and will work well when the time comes.
I wonder how many crypto gurus from 2017 made a comeback in 2020-21? To be fair, stock and option traders are just as bad as crypto traders now. There are young "gurus" all over Youtube and Twitter teaching people how to trade stocks and buy/sell options with the assumption that buy-the-dip always works. The way stocks recovered in 2020 (from a 30%+ drop to new highs in like 4 or 5 months) has given many a false sense of security. When I warn them of prolonged bear markets, they say "if you're afraid of stocks you probably shouldn't trade." As if they're the experienced traders and I'm just some scared newbie. They never traded through the dot.com crash or 2008, nor have they backtested their strategies through those times.
When we finally do have a correction that turns into something more the Fed will step in immediately like they always do.
Once they backstopped JUNK BONDS that was all the proof needed to show they will never allow a bear market again.
Only way we get a real bear is if (when) the house of cards finally collapses.
Once they backstopped JUNK BONDS that was all the proof needed to show they will never allow a bear market again.
Only way we get a real bear is if (when) the house of cards finally collapses.
The big multi year bear markets often start when a mature bull mkt makes a parabolic move to new highs with the trend line getting real steep - just like what we have now.
A proper bear market demands that it traps the masses of retail into a greedy FOMO frenzy before it plunges.
A proper bear market demands that it traps the masses of retail into a greedy FOMO frenzy before it plunges.
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