What say you financial wizards? I saw this article today and thought I'd share. To me, the gains the markets have seen in the past year have seemed insane and I figured there'd be a "reset" before now. But I know nothing, lol.
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Stocks have been in the midst of a long bull market, but there are signs that it's finally going to run out of steam and will inevitably be followed by a bear market and a difficult "reset," according to Chris Vermeulen,CIO of Technical Traders.

In an interview with Bloomberg, the investment chief pointed to the recent run-up in defensive assets, like precious metals, energy stocks, and industrial stocks. Those areas all typically do well in the late stage of a bull market, which is inevitably followed by a bear market or a "financial reset," Vermeulen said.

Investors are likely heading into another bear market, similar to the ones that followed the dot-com bubble and the 2008 financial crisis, he predicted. That could end up sparking painful stock losses for investors, with people seeing their wealth decline as much as 30%-50% over the next year, he warned.

"I think we're coming into a major market top, more or less a financial reset," Vermeulen said Tuesday. "It's short-term, temporarily painful. But we need markets to reset. We need regular pullbacks and corrections in order for the market to keep going up."

That reset could also come with a recession, Vermeulen said, with industrial stocks in particular signaling a slowdown for the economy. While the sector has done well in recent months, buyers of industrial goods typically upgrade their equipment at the end of an economic growth cycle, due to "huge delays" between slowing business and orders for new machinery.

"They don't realize we're coming to the end of a growth cycle, and the music is about to stop," Vermeulen said of US firms. "Industrial stocks have just continued to muscle their way higher. They're hitting all-time highs, and that is a sign that we're going to see these companies eventually start to slow down."

Investors remain concerned over a potential recession, especially as inflation has remained stubbornly elevated and the Fed looks poised to keep interest rates higher for longer. The economy has a 58% chance of tipping into recession by March of next year, per the latest estimate from the New York Fed.

There is uncertainty about who will win in November plus if for the first time in history a potus may be incarcerated. Plus-Wall Street and reality have not jive for many years.

Here is my 2¢.
For consumers and businesses, higher interest rates force prudence in borrowing decisions, increase the cost of capital, and encourage saving. For governments, rates will necessitate a reexamination of fiscal outlooks in the near term. The new reality of rising deficits and higher interest rates will elevate concerns about fiscal sustainability. And, barring a drastic productivity rebound, the chances of avoiding a recession remain low.

Higher interest rates are a welcome development, despite the expected increased volatility while the market adjusts to this new normal. For a well-diversified, long-term investor, higher rates create a solid foundation for risk-adjusted returns going forward.

I believe if we do have a recession, it will be short lived because the Fed's will do everything possible for a long term melt down (something that wasn't done in the 20's & 30's). I do believe also inflation will stay high and unemployment will be above normal with robotic advancement in the world moving forward. I will say inflation & growth in private stock accounts will be equal to one another, so a slow boring year in stock market growth.

Election year is going to be a sideways movement year in the financial world. The unsettled worries and wars started in global countries will play a huge part in a stable financial economy.

It's been a rough month in the market, but we've had a good run. In my opinion, we still have some good times ahead but it doesn't feel great.

Resets are good,,,,,we’re due

Went from talk of multiple rate cuts this year,,,1-2 rate cutes,,,,no rate cuts,,,,, now the possibility of rate increases

Lots of different issues all coming together. More crazy spending(Ukrain/Israel spending package)seizing Russian assets, flight to the usd, election, geopolitical, election,,etc

Yotetrapper,,,,,,, you can make money when the market is falling. A lot of money


Question:

If the governments can just print money? Why do we pay taxes??

"Investors are likely heading into another bear market, similar to the ones that followed the dot-com bubble and the 2008 financial crisis, he predicted."

This is not the old days pre-2000. The Federal Government and the Federal Reserve will come to rescue with a lot of printing and borrowing. Too many voters' 401k's will be affected. Most investors are probably aware of this. Not so much risk as reward these days.

In 2009 the dow was 7600 and now almost 40,000. The usa as a whole must be in great shape....

Not sure who wrote the OP’s article???

A lot of people write articles,,,,,

One guy you often see quoted is Robert Kiyosaki

He’s a total loser,,,predicted 17 of the last 2 bear markets. Lol

Doom/gloom sells

It was written by a Jennifer Sor.

https://www.msn.com/en-us/money/mar...ars-to-recover-from-cio-says/ar-BB1lNAyc

Whatever it’s gonna do, just get it over with so I have time to recover before retirement!

I don't think I'd have too much confidence in this guy's predictions.
Will we have a correction ? Certainly but when and how severe is anyone's guess.

I don't subscribe to his belief that we must go down in order to go up. That isn't even logical.

What we need is improving profits and fundamentals along with lower debt and regulation.

Check out Chris Vermeulen's "team" on his website. The chief operating officer, Ashley Mulock, has a degree in outdoor recreation & tourism. Worked previously as a reservations agent at a Ritz-Carlton hotel in Florida.

There are no registered financial professionals on the "team".

Historically we have had a correction of maybe 10% every 1.2 years on average. That makes it a pretty safe prediction when you claim we will have a correction. DUH.

With all the different negative forces aligning to create volatility, it would be surprising if the market didn't decline somewhat.
Yes some things will get hurt worse than others. Companies with no earnings, high debt, low revenues, crappy cash flow are bound to be punished.

Just don't panic. Plan your trades and trade your plan. Chaos presents opportunities.

Do whatever you need to do to sleep at night. If you believe this is the start of something major it still isn't too late to hedge. It might be expensive and unnecessary in the long run but if it makes you more comfortable then do it.

And SPJones is right You can still make a lot of money in a falling market.

As I’ve said before I’m a grain guy, and so I love volatility as that’s when some of the best profits are made.

Thank you White17 on the insight of the market. Good information. Yes Chaos presents opportunities.

Corrections are part of the investment journey and as stated above are frequent. The difference now is that 10% is a much larger figure than 30 years ago. We are still more heavily invested in securities than many advisors say we should be at our age. (76) We meet with our financial planner next week and will put together our plan and or plans for short and longer term. We have put enough in cash based to provide for our annual needs for about a decade. Now we are trying to decide how much risk we want in the remaining portion. I unlike many who wait for the dips and peaks and are good at making the right choices doing that, am a long term type investor which has suited us well to date.
The market is not nearly decoupled from the economy as the overall feeling of the people and that is a good thing, one does not make money betting on societial feelings.
Bryce

X2 Bryce

Far more money has been lost by investors trying to anticipate corrections than has been lost in all the corrections combined.

What little I have invested is in there for the long haul so I won't be making any changes to anything. Just trying to learn how the market works better and always find posts like this one to be insightful.

Commercial property drag everything down if all else fails.

Did not read all of the replies, they tended to primarily the same any way !

If you are in the stock market for real, not just a couple hundred dollars, these ups and downs are part of the process of being there to garner the use of it.

True marketizer, lol, won't be spooked by these movements they just acquaint where to move funds to an offset, and usually won't move much any way.

You don't make capital in the market with jumping around every time there seems to be a volatile situation ! It takes years to really see improvement in a portfolio, people say "no it doesn't just see all the millionaires in", well after you have large money it grows quite quickly, getting the large amounts is the growing process that hurts one's patience !!

Certain marks of caution are a standard any more, most presidential elections, un-stable war fare as is happening now with Ukraine and the middle east are always moving the market. There is the EV market and push as well !

Rates finally back to historical normal levels. We lived too long on free $ and zero rates before this stretch.