After the brutal economic beatdown of the last six weeks, it's pretty tempting to look at the market and think..."time to buy low!"
That's exactly the kind of thinking that wiped out a lot of investors AFTER the 1929 crash. The crash itself, in October of that year, resulted in the Dow losing about 25% of it's value in two days. It then stablized and moved higher for several months, and remained well above that bottom for the better part of a year. But in mid 1930, it started a long, two year slide that cut the Dow from 200 (the price at the bottom of the October 1929 crash) to less than 50 in mid 1932.
Oil prices crashed overnight last night. West Texas Intermediate crude traded at less than $11/bbl overnight. It's a specific reflection of the deep economic damage of the last two months.
I hate to say it, but there's a lot more economic carnage to come. Neiman Marcus is filing for bankruptcy. I expect we'll see several major airline, hotel, cruise and vacation destination companies declare bankruptcy. Probably some large restaurant chains. And that's just the really visible stuff. The number of small business wipeouts will be epic. It's going to take years to rebuild the need for those jobs.
Step carefully with your investment strategies.
That's exactly the kind of thinking that wiped out a lot of investors AFTER the 1929 crash. The crash itself, in October of that year, resulted in the Dow losing about 25% of it's value in two days. It then stablized and moved higher for several months, and remained well above that bottom for the better part of a year. But in mid 1930, it started a long, two year slide that cut the Dow from 200 (the price at the bottom of the October 1929 crash) to less than 50 in mid 1932.
Oil prices crashed overnight last night. West Texas Intermediate crude traded at less than $11/bbl overnight. It's a specific reflection of the deep economic damage of the last two months.
I hate to say it, but there's a lot more economic carnage to come. Neiman Marcus is filing for bankruptcy. I expect we'll see several major airline, hotel, cruise and vacation destination companies declare bankruptcy. Probably some large restaurant chains. And that's just the really visible stuff. The number of small business wipeouts will be epic. It's going to take years to rebuild the need for those jobs.
Step carefully with your investment strategies.