The biggest question we have been asked from our members is – “when is the best time to take advantage on the stock market?” Now, with so many opinions and a vast range of historical data, I will break down the situation into 400 words or less. Now our role at YIG is not to provide personal advice, it is instead to give you the information you need to make your own calculated investment decisions. So lets breakdown our current market analysis.
When will the markets bounce back?
Markets have bounced back this week with the Dow opening 600 points higher on Thursday morning (USA EST) marking the third day in a row of positive gains. With our current predictions, the current uptrend will not last long.We are looking at a long term Bearish market, that won’t produce much return in the next 2 months (our opinion based off research). It seems that some investors have been caught in the Bear Trap without recognising the “symptoms” of the GFC or 2000 tech crash. With big downturns, we generally see rallies in-between big dips as investors aim to get in on short term gains. Now from what we understand, we are currently in the midst of a virus that has not yet run its course. With long term economic effects on businesses and investor confidence, it is hard to see how businesses could post positive returns in their quarterly results coming up. It poses the question are we currently in phase 2?
It’s not all bad news
Now I hate to be the person that brings bad news, and in fact there are silver linings to the story. With the world we currently live in, we are interconnected across the globe. With the current medical talent we have posed across our nation and worldwide, this virus can only last so long until we can fully contain it. With full containment, comes investor confidence – not only in the stock market but in all financial derivatives. We could be looking at a period of 3-6 months of economic downturn, however Governments know from other historic events in the past how to efficiently protect their economies with stimulus and monetary policy manoeuvres.
So when do I capitalise ?
From our understandings and research, our view on the markets will be a few months of bearish trends before anything substantial happens with the market. Jumping the gun as we like to call it is when investors invest too early and are hit with another heavy downturn causing them to sell off. Our strategy is to hold on market investments until the market fizzes out. A long term investment in the current market environment does hold its benefits, but YIG views the current situation – as why not hold till these companies drop after poor quarterly results in March and June?We could be looking at stocks falling another 20-30% if the virus does shut down Aussie business. Just something to think about. Enjoy the weekend and Subscribe to us for free down below!
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Tyger Fitzpatrick, Founder of YIG.