How To Get Big Profit The Stock Market Crash In 2021
Introduction Of How To Get Big Profit The Stock Market Crash In 2021
How To Get Big Profit The Stock Market Crash In 2021. I also go over some stocks that will make you money in the long term even if you buy them right now so year to date the s p 500 is up about 3.8 if we zoom out to the last year you still can see significant gains of over 30 percent and if we zoom out even further to the last five years we can see that the s p 500 has almost doubled year-to-date the dow jones industrial average went from about 30 000 to 31 500 which is up almost five percent in the last year it went from twenty-four thousand to thirty-one thousand five hundred so over a thirty percent game which is very similar to the s p 500 and looking at the last five years we can see.
That it went from around 17 200 to 31 500 which is up 83 so it’s obvious
That it went from around 17 200 to 31 500 which is up 83 so it’s obvious if you look at the overall big picture that it doesn’t seem like this is a crash at all sure it is a decently sized correction but nothing like 2008 or won the pandemic first hit however when you look at the Nasdaq composite that’s when you start to see a pretty big sell-off the Nasdaq is more focused on tech and high growth stocks which are the stocks that have been hit pretty hard recently so we can see that the Nasdaq hit an all-time high of over 14 000 in February and now it’s at just under 13 000 which is like a 9.7 percent drop however if you zoom out to the past year or five years.
We can see how much amazing growth there has been one year ago the Nasdaq was at about 6631 so it’s over doubled in the last year imagine if you had sat on the sidelines this whole time but yeah if you look at some of these stocks that had huge price run-ups in the last year you’ll see some drastic falls in the price for example tesla which hit an all-time high of 900 and 40 cents but is now trading at just under 600 or apple which hit a high of a hundred forty-five dollars and nine cents and is now trading at 121 dollars and 42 cents a lot of the people that are investing right now are brand new which don’t get me wrong I love and it’s one of the reasons why I started this channel and started talking about investing however this doesn’t mean that they started investing in the last year.
Where everything we’ve seen is growth pretty much so my point is many of today’s investors have not yet seen a correction and that’s because they started investing right after the pandemics started now nothing has changed fundamentally about these companies that took massive price dips short-term price movement is more based on the motion than actual fundamental changes in companies so I do think that today’s investor on average is a bit more susceptible to seeing a big correction dumping stock from fear losing money and then just creating a bigger market crash now I will say that today’s possible market crash is not reminiscent of the 2008 crash.
I know there isn’t a way to get a loan that you should not be qualified for this current correction
Because defaults on consolidated mortgage-backed securities and subprime housing loans were what caused that one the lending atmosphere today is way more strict and as far as I know there isn’t a way to get a loan that you should not be qualified for this current correction and possible market crash is more based on consumer perception of stock valuations fear of inflation profit-taking and well of course panic selling let’s take a look at interest rates so since late 2018 when they hit a high of close to five percent it has dropped down to as low as 2.65 in January 2021. since then it is back up a bit and people are worried that rates are going to go up.
When rates go up this means that the cost of borrowing money is higher which could have negative effects on the housing market and if you didn’t know the housing market right now is really hot homes are selling fast many with multiple offers and the cost to borrow money which stimulates the economy is very low hence there is this whole fear of interest rates returning to a more normal level now going back to the stock market crash right now tech stocks and high growth stocks are seeing a huge correction because they increased so much in the last year it’s only healthy because growth like that just cannot happen forever some could even argue.
That this was a tech and growth stock crash but even with the most recent drop if you had bought tesla in March of last year for 80 splits adjusted you’d still be up 7.5 x and that’s the same with a lot of growth socks so what I will say is right now it’s not a real crash it’s a much-needed correction but a whole market crash is possible it’s just impossible to predict when it’s going to happen because it’s likely going to be emotion-based and that would require a whole lot of bad things and retail trader emotions to set off so now what should you do should you try and time the market not buy anything and just wait until you think stocks aren’t overvalued people are always trying to time.
The market but you guys this is almost impossible for example between January 3rd, 2000 and December 31st
The market but you guys this is almost impossible for example between January 3rd, 2000 and December 31st, 2019 missing 20 of the best trading days would have reduced your annual average return by 6 and 7 out of 10 times the worst trading days were followed by some of the best trading days so really you can just see how hard it is to predict the market because a lot of the movement comes in these individual days I know everyone is always trying to predict the next stock market crash and at some point you know it will happen but using that as an excuse to not put money into the market is a big mistake in my opinion in may of 2020 everyone thought.
That there would be a second crash after stocks rebounded even I thought so because everything looked pretty bleak businesses were shut down unemployment was high and it seemed like tenants were just going to have serious problems coming up with rent money but I still put money into the market and it’s made a whole lot of money the same thing happened near the end of 2020 and the same thing is happening right now if I had avoided putting money into the market this past year I would have lost out on hundreds of thousands of games and I even have friends who just kept putting it off because everything just seemed way too overvalued.
There’s no way that things could continue going up and hence they missed out on a lot of gains even now the stock market would have to drop like 40 50 percent to see the gains leveled out now could it do that you know it is possible but if you want to play it safe after making some good gains you can always sell some off to take some of the profit but I don’t recommend selling everything unless you think something is fundamentally screwed with that company especially if you’ve held for under a year and are in a high-income tax bracket as these gains will be labeled short-term capital gains I want you guys to accept that there is going to be a crash sure right now I think it’s not smart to put all your money into the stock market at once rather you should consider dollar-cost averaging like.
What do you guys think will this tech and growth stock correction slash crash turn into a whole market crash
What I’ve been doing the last year the way to win at the stock market and build long-term wealth is to invest consistently over a long period that’s how you let your money grow without losing all your hair I know it’s boring to hear that but historically that’s been the surefire 100 guaranteed way of winning in the stock market now I’ve been picking up more shares these past couple of weeks, for example, I’ve been buying more tesla apple Alibaba Palantir all of which are on sale right now.
If you want to diversify and I think you should think about picking up some stocks in the travel or energy sectors these are less likely to be hit as hard by an upcoming crash and they have been sort of immune to the corrections that have been happening recently, for example, you have disney you have airline and cruise companies and even uber I think is a great pick also consider getting some etfs like vo or some of the arc etfs like ark which was hit pretty hard recently.
What do you guys think will this tech and growth stock correction slash crash turn into a whole market crash i think it is inevitable at some point but how much longer will it go before it does crash based on history it’s safe to say that the crash will happen but we just don’t know when and therefore i always just say dollar cost averages out take out some profits if you want and just remain in the market for as long as you can there’s just no point in staying on the sidelines all the time.