The Market is still overpriced – A short write-up

by hamstringstring

The last 4 years have seen insane gains to the stock market at rates averaging 17% a year prior to the crash. In the past market returns have been 7% and institutional investors who are able to return 10% or more a year are considered legendary. While these numbers certainly suggest a lot of investor faith in a Trump lead economy, the GDP increase has been tracking up at much closer to that standard 7%.

Here is a graph depicting just how crazy the market has gotten in the last half decade

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We’ve been due for a massive market correction for a while now, we just needed a recession to trigger it. The market is still trading above it’s GDP equivalent and that is not factoring in the massive drop we are expecting from the recession, which the IMF says could be bigger than 08′. There are very few recessions that have market downturns of less than 3 months, don’t fall for the bull trap being set. The market in the last decade has absolutely destroyed risk parity to the point where bonds are barely worth investing in. I’d personally stay away from the market until it recorrects. The feds money printer is just going to lead to stagflation.

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I welcome civil discourse for anyone who disagrees with me.

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.

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