Current market conditions I am a believer in keeping up to speed on the global markets and having strategies in place for certain eventualities. Anyone who expeienced the crashes of 2000 and 2008, as I did, knows it makes sense.
There is a situation unfolding right now with the bond market and the trade war with China and I agree with our friend that it is worth considering.
That is the only thing I agree with him about though. There are a lot of opinions out there and regardless of how much research you do to claim you know what is going to happen is only evidence of foolishness and in the case of our friend an 'I know it all and you are all stupid' attitude which is just arrogance and doesn't give him any credibility.
Now I am not going to say what I think will happen because I don't know but here's a few things that I consider worthy of note..
There have been intelligent people shouting that the financial markets are doomed for decades. In my opinion they are right but what they never seem to understand is that the financial system in question has a profound resilience. It tends to survive over and over again in spite of the fact that it will no doubt eventually collapse.
There are also other intelligent people who tell us all is well and the system will survive.. so far they have been right.
There are also many who get carried away and rant about the collapse will happen tomorrow. I will post a hilarious video about this when I'm done with this one.
My best guess is the current situation is not going to trigger a huge collapse in the near term but may well trigger something like last January when the S&P had a 10% haircut and then continued it's lala land uptrend. Maybe this next episode will cause another 10% drop or 5% or 15% who knows? A complete collapse? Well in that case we're all going to hell in a hand basket anyway because currencies will no doubt crash too and one morning we'll wake up and find our Brokerage doesn't exist anymore. Hopefully and thankfully I don't think we are there yet!
So the only real question here is do I sell my EFR because I think the current broad market setup is about to wipe out all my gains from the last 12 months?
A picture speaks a thousand words.. here is what happened last January when the S&P took a 10% fall.. Make up your own mind if you believe the mad man who keeps squealing about the stock market taking EFR down to £2:
The upper chart is 12 months S&P
The lower chart is 12 months UUUU
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