Many people will agree that the US stock market is extremely overvalued. The majority on Wall Street believe that US equities are going to remain strong a little longer. There are others who feel that it is time to shift gears and go into a low-risk investment strategy. Economist Ted Bauman feels that the US stock market is extremely overvalued. He is an editor for Banyan Hill Publishing and writes three newsletters that are meant to help people invest properly. He earned degrees in history and economics while living in South Africa and after over twenty years he has become a finance expert on low-risk investment strategies. He offers several reasons why he feels the US stock market is on the verge of collapsing and he gives simple advice on how to protect your wealth.
Ted Bauman feels that rising interest rates may end up causing a stock market crash. The Federal Reserve has indicated that the US economy is relatively strong and that more rate hikes will come in the foreseeable future. The US has a lot of debt and if interest rates keep climbing, it will be harder for the federal government to service the debt. Higher interest rates will also cause investors to flee the stock market and go into the bond market when yields are more attractive. Another possible catalyst for a stock market crash that Ted Bauman points out is the trade war with China. Many multinational corporations rely on business with China and are listed on major US stock exchanges.
If the trade war continues, China may retaliate and many of these corporations will lose revenue. This will eventually reflect in the share prices of these companies.Ted Bauman sees a crash coming but Bauman urges investors not to panic and sell all their stocks. He feels the trade war has created a major buying opportunity for many top companies in China. The Shanghai Composite is down almost twenty percent for the year. Mr. Bauman also feels that investors should hold bonds to best investment offer a cushion for their financial portfolios. He feels that investors should never ignore bonds and should properly balance their portfolios with stocks and bonds.
Government rules designed to increase competition were essential to producing the world we know today – but the market power of large firms has driven new company formation into all-time lows. #Capitalism https://t.co/TUVj2pUuab
— Ted Bauman Guru (@TedBaumanGuru) November 20, 2018