Post-Lehman path makes a case for buying the rout
People are bailing out of equities. Thursday's stock market action could fairly be called a rout. What to do?
Most of the time, equities go up, according to Bloomberg. It's better to buy them when their price has just fallen a lot, and in the long term the natural propensity of share prices to rise will probably give you a good deal.
These arguments, when employed during similarly fraught circumstances in the post-Lehman crash of 2008, proved to be valid. On Oct. 1, 2008, Lehman had been bust for two weeks, Congress was objecting to the bank bailout, the $S&P 500 Index(.SPX.US$ was already down by about 25% and any number of horrors seemed possible. It's a good comparison to where we are today. Had you bought then, you'd have had to withstand a loss of more than 40% over five terrifying months. But you would have been made whole by the end of 2009. And by the top of the market at the end of last year, you'd be sitting on a 440% total return. Even now, you would have more than quadrupled your money.
For any investor seeking the source of conviction to weather the stock avalanche, $JPMorgan(JPM.US$ 's strategist Marko Kolanovic neatly summarizes the points you have to believe to be bullish at this point:
We maintain our positive view. May is a template for the year, record dispersion provides opportunities. We remain positive on risky assets due to near-record-low positioning, bearish sentiment, and our view that there will be no recession given supports from US consumers, global post-COVID reopening, and China stimulus and recovery. The war in Eastern Europe is a significant risk for the cycle but will likely converge to a settled solution in H2. We believe that markets will recover year-to-date losses and result in a broadly unchanged year.”
The basic points, summarized by Bloomberg, remain that stocks usually go up, being out of the market carries risks, and stocks are a better buy for the long term when their price has just come down.
Disclaimer: Investing involves risk and the potential to lose principal. Past performance does not guarantee future results. This is for information and illustrative purposes only. It should not be relied on as advice or recommendation.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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2ndBreakfast : Buy! When others are fearful, be GREEDY
Solid Snake : That analyst is an idiot, we are already IN A RECESSION. Last quarter was negative GDP, and what exactly makes you think this quarter will be any more positive with all the bloodshed in the markets?? Seriously??? Mainstream Wall Street media walking us off a cliff for their own gain.
Eeeeeeeethan : Those who are bullish are all medium-and long-term, while those who are bearish are short-term. To copy the bottom of the bottom, to go short, it is a game. This article is just a review of history and don't take it so seriously.
Daveed2022 Solid Snake: people believe it too, I feel sorry for the 401ks and pensions, they are telling them to hold while the market just keeps going down as we head into possible stagflation
KingNY-Life : This article encourages small scattered trading, which I find ridiculous, because the stock market adjustment is far from over, maybe by the end of the year.
SIONG HOCK : Live the same natural rules of life with high tide and low tide and tsunami
一株冲天 : he forget that during Lehman, rates were high and no QE was in place, so the Fed has many ammo to save the market. Now the opposite is true, fed has no bullets, rates are still low and too much debts in the system. 14% of US Treasury maturing in these 4 months. Will be lucky if it doesn't spiral into a debt crisis featuring widespread defaults
71396383 : anyone else having trouble with the moomoo app? I've had nothing but trouble since enrolling, plus none of the so- call "promised stocks" for deposits. when I contact customer service they want pictures of my " me" page on my phone because they claim that I'm not a real person. I've never had any trouble with any other platforms including Etrade, Coinbase, Cashapp, Webull, and Fidelity
meowmeow66 71396383: maybe you didn't find the right steps to get the free stocks?
hope this help
https://www.moomoo.com/hans/community/feed/107171423388054?lang_code=0
71396383 : I finally reached customer svc and they said they thought I was a robot and wanted pictures off my phone with "me" page. They said they would add links to my page but it will take a couple days. Guess I just have to wait and see.