The Worst possible Scenario for NASADQ 100.(18 months forecast)

18 בפבר׳ 2022

"In trading, you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep the money."(Ray Dalio)

I believe everything you need to know about trading/investing is summarized in the above sentence!

Now let's see if the worst scenario is going to happen:

To evaluate this possibility we should look at Big tech companies trading below their pre-pandemic prices!

Meta(Facebook): 500 Billion dollars washed out which is equal to 70% of the total bitcoin market cap, and 1/3 total cryptocurrency market cap..!



BABA: 510 Billion dollars washed out which is equal to 70% of the total bitcoin market cap, and 1/3 total cryptocurrency market cap..!



Netflix: lost 50% of its value



or go back in history:

Bank of America during 2007-2008: lost 95% of its value in less than 27 months



Now let's evaluate the S&P 500 and look at the historical data:



Source of data: Investopedia:

The average length of a bear market is 349 days and the average loss is 36.34%

The bear market from 2007 to 2009 lasted 1.3 years and sent the S&P 500 down by 51.9%.

Between April 1947 and September 2021, there have been 14 bear markets, ranging in length from one month to 1.7 years, and in severity from a 51.9% drop in the S&P 500 to a decline of 20.6%, according to an analysis by First Trust Advisors based on data from Bloomberg.


So we have historical data, recent changes in the market behavior and we expect changes in the monetary policy (QT) that could cause a Bear Market.

Markets recovered—as they always have over time.

While so many fears of the bear market, do not forget, it creates the best opportunities to make money..!

Over the longest-possible term, bull markets have gone higher and lasted longer than bear markets.


The difference between a pro and amateurs:

"Amateurs think about how much money they can make. Professionals think about how much money they could lose."(Jack Schwager)

Finally, I would like to finish with:
“Hoping for the best, prepared for the worst, and unsurprised by anything in between.”( Maya Angelou)

A big question to answer:

Are you there and have enough free capital to buy the dip or you are cashless and fully invested like ARK invest???


Best,
Moshkelgosha

DISCLAIMER

I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.