Monday, August 24, 2015

What I Learned from the Last Crash

The market volatility of the past three days has caused me to think back to the last major stock market crash in 08/09.  Here's what I learned from then:

  • The  new Fed chairman will make a mistake.   Back in 2006, Ben Bernanke claimed there was no subprime mortgage issue and did not address it.   He was a new Fed chairman at the time.  Janet Yellen has been chairwoman for less than a year.

  • It will get worse before it gets worse.   Monday's volatility will be repeated many times. Monday's lows will get taken out.

  • The market will take a while to bottom, up to several months.   During that time, being in the market will be extremely painful.

  • The market will recover and reach new highs, as it has from every other bear market.

  • My plan for now is to keep our current investments and add funds with every 10% decline in the market indices, with a target of being fully invested around a 50% decline.  While good in theory, I expect the plan will be difficult to execute as our current stock investment values are reduced by 50%.

    For more on Strategies and Plans, check back every Monday  for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2015 Achievement Catalyst, LLC

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