What Could Kill the Stock Market Rally and What to Do About It
Like I always say, “It’s all good; until it isn’t.” And right now, it’s all good for the stock market.
But the “wall of worry” the market’s climbed might be starting to crumble on top of it.
That means the rally, every point, percentage, and dollar tacked on since March 23, 2020 could be in danger. The markets could start to slip, and once they start, there’s no telling how low they’ll go.
You need to make sure you’re prepared. There are simple precautions you can take to help protect your wealth and your family – but you need to act quickly. Every day, we’re trading on borrowed time and a market that’s becoming thinner and thinner, essentially balancing trillions of dollars on the tip of a pin, and one wrong move could cause it all to evaporate into thin air.
Those who protect themselves, and do it the right way, can protect their family’s financial future for generations to come.
Those who do not risk losing everything.
My team has created a straight-forward guide on how to protect your financial future, and you can check it out here.
The “wall of worry” has been built higher and higher as people forget the feelings of the March lows.
The Tumble, Stumble, and Slip of the March Markets
The wall of worry investors climbed up, and hope they’re over, since the stock market’s March 23, 2020 lows was one of the steepest, slipperiest, and most formidable obstacles anyone’s ever seen, by far.
Of course, the wall’s deep, steep, and sickening foundation is the sudden, scary, and surreal invasion of a novel coronavirus we now know as Covid-19.
Furious infection rates and frightening mortality metrics led cities, states, regions, and countries to shut down, stopping economic activity globally.
The fallout was immediate.
Hundreds of millions of people, in total billions, wouldn’t be working, wouldn’t be making money. Businesses that had to close might never open again. Unemployment was going to soar, and bankruptcies were going to follow.
No one was surprised to see stock markets around the globe stumble at first, then slide frantically.
In the U.S., the Federal Reserve came out, guns blazing, arresting the market slide with a smorgasbord of liquidity and backstopping promises and programs.
That’s all it took for smart investors to jump back in, “buy the dip” and fuel a market rebound that’s amazed and worried both bullish and bearish market participants and pundits.
Now, we’re at a place where investors are asking themselves, what’s next?
They’re taking another look at realities the wall of worry’s built on and wondering if standing on top of it is still a smart place to be.
The wall, built on a foundation of Covid-19, is still stacked sky high with unknowns including: Will fresh virus spikes cause another round of shutdowns? Will high unemployment persist? How many millions of consumers and businesses will have to declare bankruptcy in weeks, month, quarters ahead? Will there be more fiscal stimulus, and will it be enough? Will the Fed start tapering its support programs? Will the U.S. and China ratchet up tensions between the superpowers? What will the November election bring? Will retail investors keep bidding up equities? Will the weight of the wall and all its worries shatter investor sentiment?
Any one of the above unknowns becoming headline news, for the wrong reason, could cause immediate selling in the market. The collective coming undone of all the market’s fears would collapse it, for sure.
But, none of that’s likely, or even realistic.
The Markets Are Charging Upward
That’s because the reality is the government, politicians, the Federal Reserve, and investors know what’s at stake. In other words all those unknowns are well known and the powers that be aren’t going to let the economy sink if they can help it, aren’t going to leave Americans without money to spend, aren’t going to let corporations fail en masse, and aren’t going to let the stock market crash, because letting any of those things happen would create chaos and a hole the country couldn’t climb out of for decades.
That’s why investors betting on getting over the wall of worry have been right. That’s why markets are back in bull market mode.
Because the playbook’s already been written, and we can all re-read it by remembering what all just happened, who did what, how stocks reacted, we can assume we’ll run and rerun all the winning plays that drove markets higher in the first place.
For now, until another black swan descends on us, your plan should be “buy the dips.”
Because that’s what’s worked.