The events that have taken place on the world's stock exchanges in recent days make me want to share this with you. To encourage each of you to consider your (short-term) investment strategy.
First question to you: Are you invested in the stock market?
- Yes? -> Then read on
- No? -> It could be interesting for you, anyway - because it concerns everybody
Nothing new?
Do you still remember the big crash of the dotcom bubble? Maybe you were too young to get the true scale. I was too young as well, but the assets that were destroyed in that short time have certainly destroyed many existences.
Today, a scenario similar to that of 2000 seems to emerge, as the so-called CIMA stocks (Cisco, Intel, Microsoft, and America Online) caused a huge stock market quake. Today are the FANG stocks (Facebook, Amazon, Netflix, Google) that reach similarly dizzying heights in the (stock) market. These, together with Apple and Microsoft, have achieved a return of 42% within a year. In the chart below you can see how the S&P 500 has already decoupled from industrial production.
Source: S&P 500 / Industrial Production
4-6 large companies meanwhile determine a large part of the stock market performance. Without these values, sentiment would not be as euphoric for a long time as it has been on the market in recent months. The market lacks breadth and depth, and at the latest one should then compare the P/E ratios of the strong values. And these are at dizzying heights for FANG shares.
Look at what we had in the recent days. The stock market already speaks about "black wednesday". Last week S&P 500 and Dow Jones lost about 5-7%, that´s a lot in one week. The German DAX lost approx. 15% in 2018, starting above 13.000 points and will end up somewhere between 11k and 12k and maybe less. This year still has 2 and a half months left.
Pay attention to your assets
What I want to say or rather make you aware: Do not invest blindly, invest your money intelligently. I do not want to put up any stock market wisdom here (I myself do not have the experience for a while) but also do not conjure up a doomsday scenario. I just want to make it clear that it can not go on forever like this. Any political unrest with the issues raised above are not even considered. If you are at a long time investment, you may want to revise your strategy, no matter how it looks, and maybe even correct it. This is not a recommendation for action but only an indication of probabilities that might occur due to historical circumstances.
I´m no financial advisor. If you´re interested, inform yourself about the current situation.
In the next days I will show you a current chart, which shows the crisis nobody wants to see. So if you want to see more facts about what is upcoming next, follow me on steemit.