Vanguard Fund Sees 70% Chance of Market Correction
I’ve been warning for a while now, here at FP, about a coming change in the economic climate. I see a change for the worse approaching. Some of this is from my own observations. However, most of it is quoting experts, many inside the system, who see a downturn on the horizon.
They don’t come much more connected and in the know than Vanguard. And that massive fund service sees a 70% chance of a correction in the not too distant future. Eric Rosenbaum of CNBC wrote about the predictions and what that may mean for investors. Even if you’re not heavily invested in Wall Street, this will still impact you. Please read the CNBC story and associated sources.
Honestly, there is always a 100% chance of a crash, correction, or recession – or worse. It’s just a matter or the timing. Vanguard joins a growing list of economists, experts, bankers, academics, and officials that see a decline in the nearer future – maybe sometime within a year.
And we are overdue for a recession. The CNBC story notes we’re in the longest period of “growth” since 1929 (beginning of the Great Depression). Funny that they also call it “nine years of ‘recovery’.” That’s because, unsaid, that the underlying problems in the economy that caused the great recession of 2008 haven’t been fixed. They merely been papered over – papered with Trillions of Dollars in funny money. That has actually added to the mess.
Here’s what Vanguard is thinking and saying:
“Vanguard, which manages roughly $5 trillion in assets and is a proponent of long-term investing, isn’t sounding the alarm bells to scare investors out of the market. But according to Vanguard’s chief economist Joe Davis, investors do need to be prepared for a significant downturn.
“It’s about having reasonable expectations,” Davis said. “Having a 10 percent negative return in the U.S. market in a calendar year has happened 40 percent of the time since 1960. That goes with the territory of being a stock investor.” He added, “It’s unreasonable to expect rates of returns, which exceeded our own bullish forecast from 2010, to continue.”
Markets rise and fall all on their own. Bubbles grow and pop naturally. Corrections, all things being equal, are generally a good, if painful (temporarily) thing. But things are not equal in 2017. Our entire financial system, monetary policy, and whole economy is run dictatorially by an unholy consortium of government and central banking. It is artificially fixed to allow greater government power-brokering (read: spending and control) and great profiteering for the banksters (banking gangsters). It benefits them alone – well a few more elites pick up a substantial amount of crumbs – but it does not help the masses.
The elite literally manufacture their money out of thin air and hollow promises. The rest of us scramble to make our livings through hard work. We do the work, obey the rules, and pay the taxes. THEY do nothing and reap the rewards.
Corrections have a way or returning a little balance. However, the machinery of global finance is so sophisticated now, so self-deluding, that it has a way of prolonging the inevitable. But not forever. One day the entire system will utterly collapse in a cataclysm like nothing we have ever seen before. That may happen next time or not – but next time is coming.
“The next five years will be challenging, and investors need to have their eyes wide open.”
-Joe Davis, Vanguard Group chief economist
Vanguard has some very good advice for investors to survive whatever may be coming. If that’s you, then great. If not, you still need to prepare. General prepping goes a long way.
However, now perhaps is the time to recenter the efforts on what would happen if your company let you go in the midst of the downturn. How would you pay the bills while looking for something else? How would you care for your family?
Those are heavy questions from a heavy subject. The rules are rather easy if also a little heavy: get out of debt, save cash, cut expenses, consider additional sources of income, etc.
The time to think about all of this and to act on the thoughts is now – not after the fact.
Perrin Lovett writes about freedom, firearms, and cigars (and everything else) at www.perrinlovett.me. He is none too fond of government meddling.