![]() ![]() ![]() "Measured from the recent bubble peak, the likely consequence will be a long, interesting, 10-20 year trip to nowhere for the S&P 500," he said. He warned of a scenario where stocks fall monumentally in addition to what they've lost already. The S&P 500 is down 13.3% to start 2021 as investors deal with the implications of monetary tightening from the Federal Reserve to slow down 8.5% inflation, as well as geopolitical and economic uncertainty resulting from Russia's invasion of Ukraine.īut while Hussman thinks average yearly returns will be "dismal" over the long-term, he also warned that there is high near-term risk as well. According to AAII's weekly survey of investors, sentiment is at its lowest point since 2009.Īnd it's showing in stocks' performance. When investors become risk-averse, they tend to be skittish and selective." "When investors are inclined to speculate, they tend to be indiscriminate about it. "The main thing that determines whether an overvalued market continues to advance, or drops like a rock instead, is whether investor psychology is inclined toward speculation or risk-aversion," Hussman, who called the 20 market crashes, wrote in an April 27 commentary. It often indicates a user profile.īut the ingredient that will make such high valuations matter is negative investor sentiment, Hussman said. Account icon An icon in the shape of a person's head and shoulders. ![]()
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