How big is the risk of sustained huge stock market decline?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
HanSolo
Posts: 380
Joined: Thu Jul 19, 2012 3:18 am

Re: How big is the risk of sustained huge stock market decline?

Post by HanSolo »

Has the OP disappeared?

It appears that the question was fully answered in the second reply:
greg24 wrote: Wed May 05, 2021 3:47 pm A large decline is inevitable. You should construct your asset allocation to be prepared for such a possibility.
Are we done here?
TimeTheMarket
Posts: 203
Joined: Fri Jan 25, 2019 8:49 am

Re: How big is the risk of sustained huge stock market decline?

Post by TimeTheMarket »

DB2 wrote: Thu May 06, 2021 12:34 pm
VartAndelay wrote: Wed May 05, 2021 3:44 pm I am holding money in total USA stock index fund and total international stock index fund. However I have seen on other forums and posts people talking about how they think the stock market is overvalued and predicting a decline. And they point to examples such as Japan in the 1980s where the stock market crashed and did not recover for a very long time. How big is this risk? They seem to be talking about the Federal Reserve and "easy money" propping up the stock market for a decade or more and are predicting there could be a huge crash that does not recover for a very long time or maybe even it never recovers. I think they mentioned something about how interest rates will have to eventually be increased and how this would crash the stock market.
This guy says the S&P will hit at least 6000 over the next couple of years and will be followed by the largest crash since The Great Depression. He explains why.

https://seekingalpha.com/article/440421 ... -pay-piper
But he also says this: “ there is no doubt that the action we have seen over these past `12 years has now conditioned investors to assume that every major dip is certainly going to be bought, as the Fed and the government are standing behind the market, always willing to pull whatever trigger is necessary in order to prop the market back up again”.

He refers to investors as a monolith. If this were true it never could have fallen because they would have been buying, not selling, yet necessarily for it to have fallen as low as it did many investors were not conditioned as he asserts.
Username is not serious :)
BogleFan510
Posts: 527
Joined: Tue Aug 04, 2020 2:13 pm

Re: How big is the risk of sustained huge stock market decline?

Post by BogleFan510 »

TomatoTomahto wrote: Wed May 05, 2021 3:46 pm If I knew, I’d be rich. If they knew, they’d shut up.
+1
secondopinion
Posts: 774
Joined: Wed Dec 02, 2020 1:18 pm

Re: How big is the risk of sustained huge stock market decline?

Post by secondopinion »

GaryA505 wrote: Sun May 09, 2021 1:35 pm
sycamore wrote: Wed May 05, 2021 3:54 pm
csan wrote: Wed May 05, 2021 3:51 pm I ran it through my calculator to compute the risk and it returned "?"
Mine said 42.
Your calculation must be off. I got 41.738259351
I got an error. We must be using different calculators. But yes, who can tell what might happen? Anything can happen, but it might not be worth the hedge.
User avatar
firebirdparts
Posts: 2557
Joined: Thu Jun 13, 2019 4:21 pm

Re: How big is the risk of sustained huge stock market decline?

Post by firebirdparts »

No calculator is required to know the answer is 42.
A fool and your money are soon partners
DB2
Posts: 1201
Joined: Thu Jan 17, 2019 10:07 pm

Re: How big is the risk of sustained huge stock market decline?

Post by DB2 »

TimeTheMarket wrote: Sun May 09, 2021 8:47 pm
DB2 wrote: Thu May 06, 2021 12:34 pm
VartAndelay wrote: Wed May 05, 2021 3:44 pm I am holding money in total USA stock index fund and total international stock index fund. However I have seen on other forums and posts people talking about how they think the stock market is overvalued and predicting a decline. And they point to examples such as Japan in the 1980s where the stock market crashed and did not recover for a very long time. How big is this risk? They seem to be talking about the Federal Reserve and "easy money" propping up the stock market for a decade or more and are predicting there could be a huge crash that does not recover for a very long time or maybe even it never recovers. I think they mentioned something about how interest rates will have to eventually be increased and how this would crash the stock market.
This guy says the S&P will hit at least 6000 over the next couple of years and will be followed by the largest crash since The Great Depression. He explains why.

https://seekingalpha.com/article/440421 ... -pay-piper
But he also says this: “ there is no doubt that the action we have seen over these past `12 years has now conditioned investors to assume that every major dip is certainly going to be bought, as the Fed and the government are standing behind the market, always willing to pull whatever trigger is necessary in order to prop the market back up again”.

He refers to investors as a monolith. If this were true it never could have fallen because they would have been buying, not selling, yet necessarily for it to have fallen as low as it did many investors were not conditioned as he asserts.
I've been reading a few of his articles recently. He sells a trading system based around Elliot Wave.
ensign
Posts: 129
Joined: Wed Jan 06, 2016 10:18 am

Re: How big is the risk of sustained huge stock market decline?

Post by ensign »

stocknoob4111 wrote: Thu May 06, 2021 3:33 pm It will eventually crash like it always does but my personal take on it is that there is still too much pessimism about the market and the euphoria is not sufficient to call this a top.
Markets are at all-time highs. What pessimism?
Post Reply