In 2000 is was predicted that a Y2K bug would hit the computer systems and crash the stock market. That never happened, and looking at computer programming it was illogical to believe that computers would crash just because of the date. However, the year is 2015 and there are financial issues are popping up around the world. These issues that are popping up aren’t just bound to hurt the other countries but it is also bound to cause the US to face a stock market crash.
Warren Buffet is one of the most financially savvy people in the country. In fact, experts put him in the top five people to watch when it comes to the stock market. Despite record trading in the stock market Warren Buffet’s holding company, Berkshire Hathaway, has been selling off stocks like crazy. They have sold as much as 99.7% of some of their stocks. While their main focus has been getting rid of consumer reliant stocks this overall does not show a good sign for the stock market.
On August 24th of this year the Dow saw its largest intraday point decline in history. In one day it dropped 1,000 points. This is not a record that sits well for those that have stocks. This is a possible sign of the recent market trend of all or nothing. As a herd people have been selling or buying all together. About 80% of the trading appears to be all or nothing on some days. On the same day that the Dow saw its major drop the markets gauge of fear, known as The VIX, showed a record volatility.
Overall the global economy has been very slow to expand recently. In 2014, the Japanese economy only expanded 7.4%. That is the smallest expansion since 1989. 2015’s expansion is predicted to be even slower by the end of the year. Russia has seen bad growth too, to the point that their currency is at an all-time low when compared to the United States dollar.
Looking at the growth in the US economy last year there was only a 2.2% growth. In 2015 the total projected growth is only 2.9%. That is next to no growth increase from the past year. Some experts predict that if the Federal Reserve doesn’t act carefully the only path left for the US is a recession which would hurt the stock market.
Recently several countries have been having major issues with debt. The most publicized of the countries is Greece. Greece came extremely to defaulting on their debt. They were able to work out a deal but they were cut off for a period of time from the International Monetary Fund. This was the first time that a developed country has ever defaulted on a payment. A year where a record like this was made does not spell well for the economy.
In June of 2015 the Chinese stock market took a turn for the worse and crashed. It suffered multiple aftershocks before starting to correct itself. This is another sign of the international economy not holding up well in this year alone.
The price of gold and the stock market have correlated over the years. When the stock market is doing its best precious metal prices are at their lowest and vice versa. As soon as prices reach their peaks in either direction they only stay there for so long. Recently silver has been experiencing record low prices and the price of gold has been relatively low. If you follow past trends, this is a sign that the market is about to flip.
With that in mind one of the best ways to safeguard yourself against the stock market crashing is to invest in precious metals. Because precious metal prices are always at their highs when the rest of the economy is doing bad but are low when the market is doing good they make a great investment. You can buy precious metals for very little now then turn around and sell them when the stock market hits its worst.
Overall signs point towards the stock market crashing before the end of 2015. The global economic times are not faring well. As we mentioned if you want to make a good investment before the stock market crashes you should invest in precious metals. That way you are safeguarded for the market crash. There have been too many negative stock records set this year for a positive light to shine on the market.