Longtime technical analyst Robert Prechter, who forecast the 1987 stock market crash, predicted this week that US equities may plunge to half their lows hit in March as a deflationary depression bites.
Now that is a mighty big call. What can one say about that other than get ready to buy buy buy the amazing bargains that will be around.
Hang on though. If the market crashes to half it’s low in March that means that many companies, and some of those will be large ones will actually no longer be around.
So what do you do? try and pick the stocks that will survive? How will you do that? As we have seen even some of the biggest companies in the world have collapsed in this credit crisis.
In my opinion if the above does happen I will be looking extremely hard at a portfolio that is made up of indexes. After all a major company can collapse but the underlying market is still there.
It’s not a sexy strategy but I bet you will appreciate the slow and steady approach in 5 or 10 years time when the market is in it’s next boom.
At Professional Investment Services (powered by Financial Gain) we prefer to take the long term approach and develop strategies that are not only appropriate to you but have been proven time and time again.
