"The "buy the dip" financial news teleprompter readers and the 30-year-old portfolio managers who have never seen a market crash are insisting that stocks are still going to the moon. Market veterans and "Hey Boomer" professionals have seen this show before. In 1987, the Dow Jones Industrial Average plunged a stunning 22% in one day. Today, an equivalent drop in the venerable index would result in a collapse of an incredible 11,000 points."
"One thing is for sure: If inflation moves higher, the war in Ukraine continues to churn, the Middle East peace does not hold, and our crushing national debt, approaching $38 trillion, spirals more out of control, the path of least resistance will likely be down. Investors should consider some crucial items now, as they may have to prepare for another 2025 correction."
"One positive is that consumers and businesses are generally in reasonably good financial shape. Stock portfolios and home prices have increased dramatically over the past few years, and the economic system is not teetering on the abyss as it was globally in 2008 when Bear Stearns and Lehman Brothers collapsed. To avoid a similar fate that year, Merrill Lynch was bought by Bank of America."
Stock market optimism remains widespread among some investors, but seasoned market participants recall past dramatic crashes such as 1987 when the Dow fell 22% in one day, equivalent today to about an 11,000-point drop. Major indices trade at all-time highs, creating vulnerability to a significant decline if inflation rises, the Ukraine war persists, Middle East peace fails, or national debt around $38 trillion worsens. Consumers and businesses generally hold reasonable financial positions, with stock portfolios and home prices having risen substantially. The economic system is not currently as precarious as in 2008, yet prudent investors should build cash reserves and take safety precautions ahead of a possible 2025 correction.
Read at 24/7 Wall St.
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