September 25, 2023, 11:05 am EDT
Be Prepared for the Worst
“Be Prepared for the Worst” is probably one of the most useful ways for survival skills. Because the person will have enough preparation when others are not. This skill can also apply for the investment world.
Particularly, it is important to recognize some signals for the potential crisis in the stock market:
- Downtrend in the Bond Market (TLT as shown)
- Technical Breakdown (09/21 article)
- IPO market (09/19 article)
The fall of the bond market indicates another rise for the cost of borrowing due to higher rates. It hammers hard on the mortgage borrowers, credit card users, and those who have debts with floating rates. The triggering point will come when job markets shrink.
Fewer income and higher expenses will squeeze most people. The stock market will suffer for sure when consumers spend less and corporations become conservative altogether.
There is no exact timing to announce the crisis. But, being prepared is always essential. One simple strategy is to scale back portfolio positions.