October 2018: Stock Market Crash or Correction?
The S&P 500 index is down by three point two nine percent the Nasdaq by four point zero eight percent and the Dow Jones by three point one five percent so the whole stock market yesterday was down only one stop in my portfolio is up and it’s Bayer and it’s only up by 0.08 percent So the whole stock market not only in America, but around the world in Europe. It’s down Is it just a correction in market correction, or a graph is hard to say at the moment? We should look further in the coming days in the coming weeks to see when the stock market goes But I don’t think it’s a craft. I think it’s just a little correction and There are three reasons why this correction happened at the current time? the first one is of course the raising the interest rates like Recently the Fed the raise the interest rate The interest rates have been low since the 2008 financial crisis And this was an important factor in making the stocks Group and the Fed have been raising the interest rates over the last quarter’s constantly, so this can scare investors away from investing the stock market because Raising interest rates made it will be harder for businesses to take loans and it will be harder for them to have The current earnings that they have right now. So this is the first reason the second reason why the stock market yesterday did so badly is because of the tariff war the trade war between China and the United States and For example Apple itself. They make all their phones all the computers in China and this trade war will affect their business It’s not only about upper most of the business in the United States will be affected with the trade war with China and the third reason is that the bull market is aging it’s already nine years since the last recession and with this aging bull market, both of the companies are overvalued or overpriced and Sooner or later they are going to crush if you see other stocks and doctor Lost the most value yesterday you will see that Amazon Clicks lost a lot about you more than the other tech companies it’s because these two stocks were really really overpriced and I also said that refunded lost more than 10% and recently when I analyzed LG funny and cool I said that the company was going to the overpriced region So so this stock also lost a lot yesterday and like I said Apple were the best Price a tech company among the big day and it was the stock that lost the lease yesterday by Falling by only four point six three percent. So what should we investors do at such a moment we can of course hedge against the stock market we can buy gold we can even Invest in crypto currencies there people were saying that cryptocurrency is the new gold It’s like a chain, but I don’t think many investors big investor institutional investors will invest in crypto currencies as a way of hedging their investments because the people that invest in cryptocurrencies Usually don’t invest in the stock market Only small investors will invest improve so don’t expect The crypto currencies to act as a hedge against the stock market the other head, of course The natural hedge is gold or the Swiss franc But I’m not there for hedging like this. I think when the stock market goes down. It’s a good Reason to buy more shares to buy good companies at lower price Arvinder is that the bank stocks are at a good price at the moment and Yesterday most of the bank’s spellbound about the two percent So it’s still a good buy and if the tech stocks continue to fold it be a good time to buy these stocks for example Amazon or Netflix all these great companies will be at a good price and if this is only a correction and Everything goes back to normal. We will just have to ride the bull But for me personally, I don’t want the market to crashing down I want to have more cash in reserve so that I can spend when the market even crash right now I have got to invest but it’s not that much I want to have more cash like what the one in the vet has in his about shahe the report for Yahoo Apple has all this amount of cash this percentage of the portfolio that you have in car I want to have such a percentage about 30% so that I can buy stocks when they are actually really really good price one lesson that we can learn from yesterday that the stock market is Unpredictable, but we should not panic because the stock market has Done badly on one day in one week. It’s not a reason funny Like I said before Rajan said that the best time to buy is when there’s blood in the streets even if the blood is your own and like also Warren Buffett said Be fearful when others are greedy and be greedy when others are fearful So I I hope you are not panicking and that you will be greedy people are panicking if people are fearful Thank you for watching this video. Please like subscribe and share. Have a nice day and good. Bye