Foreseeing the stock market’s future is one thing, but knowing that a bad crash is coming is scary as investors hustle to salvage and secure investments. Mark Spitznagel is the Bear of Wall Street, and he predicted the worst.
The Worst is Yet To Come
Mark Spitznagel, the Wall Street Bear, predicted that the worst stock market crash in history is yet to come. “It will be the worst market crash since 1929,” Spitznagel said.
A Peak Into the Past: 1921 Market Rise
The height was in the 1920s when the Dow Jones rose quickly from 63 in August 1921 to a whopping 381 in September 1929. The Federal Reserve History report recalls the prestigious economist Irving Fisher’s words, “Stock prices have reached what looks like a permanently high plateau.”
A Peak Into the Past: 1929 Market Crash
On Black Monday, October 28, 1929, the Dow Jones steadily declined each day. In 1932, it dropped to an all-time low of 89% compared to when it first reached its highest height. It would only regain traction and improve in the early 1950s.
The Fed to the Rescue 1929
As the market continued to plummet, the Federal Reserve stepped in by purchasing securities on the market. The low interest created a way for funds to be available, and financial institutions could continue lending money at a lower interest rate. This process gave rise to the credit bubble.
The Credit Bubble to Blame
In an interview with Bloomberg, Spitznagel said this is “the greatest credit bubble in human history.” The challenging economy and inflation have resulted in more businesses and consumers relying on loans and credit to survive. This leads to something called a credit bubble.
Inevitable Pop of the Credit Bubble
According to Mark Spitznagel, “credit bubbles end, they pop and there’s no way of stopping them from popping.”
Combat the Crash – Contingency Plans
To get ahead, Spitznagel suggests that investors work on better ways to secure their money. To do this, investors must build portfolios that can withstand market crashes and calamities. Creating a foolproof portfolio should be prioritized over looking for new stock investments.
Similar to a Forest Fire
In an interview with New York Magazine’s Intelligencer, the Wall Street Bear compared the Federal Reserve Bank’s “monetary intervention to a forest fire suppression.” Preventing the forest burn can only carry on for a specific time frame until it can no longer be repressed, resulting in worse repercussions.
Doing the Prep Work
Have variations. As part of the contingency plan, it’s safe to say that investors “shouldn’t put all their eggs in one basket as it could go up in flames,” according to Spitznagel.
Diversify Your Portfolio
As an expert, the Wall Street Bear also suggested that investors create a secure portfolio by adding variety. Variety may include bonds, real estate, stocks, and more. In this way, if one asset or stock is doing badly, another can survive.
Gold Is a Good Option
Gold stocks have thrived throughout time, and to date, one ounce is worth more than $2,300. Historically, gold increases in value even when the economy rises. Experts recommend gold as a good option for diversifying your portfolio.
Bitcoin Crypto
Experts suggest investing in cryptocurrency like Bitcoin, which has already reached $73,000, and some experts predict that it is bound to grow even more. Robert Kiyosaki’s post on X June 6, 2024, prediction states that Bitcoin will be $350,000 by August 2024. The Rich Dad Poor Dad author and businessman accurately predicted many financials.
Real Estate Investments
According to experts, investing in real estate is another wise option. FNRP (First National Reality Partners) is sought after because it provides vetted commercial real estate deals. The company manages the commercial leases and owned properties for the investor.
Rare and Fine Art Investments
Artworks have also seen positive ROI, and organizations like Masterworks, a Fintech platform, allow investors to buy art worth millions. The company’s portfolio is worth nearly $1 billion.
Spreading the Risks For Better Wins
Experts like Mark Spitznagel know that spreading the risks is one of the most impactful ways to help safeguard your assets and money against a market crash. Sometimes, the markets can be volatile, and in the case of his predictions, it’s better to work on that contingency plan.
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Featured Image Credit: Shutterstock / Karolis Kavolelis.
The content of this article is for informational purposes only and does not constitute or replace professional advice.
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