It Is An Anxious And Worrisome Time For Investors
Nobel laureate economist Robert Shiller warns that it is “an anxious, worrisome time” for investors, and the economic uncertainty won’t be lifting anytime soon.
Stock-market volatility, uncertainty about the Fed’s interest-rate plans and any number of global economic fears all justifiably have average investors on edge.
Investors have grown used to Zeor+ US interest rates and a booming Chinese economy. No one knows how the global economy will manage should China’s economic problems grow, though the IMF does not see any major issues with China’s restructuring and stabilization measures.
Many investors are not waiting to find out, many are selling stocks.
When investors feel unsure about the future, many panic. The July-to-September Quarter was the S&P’s worst since Y 2011.
And adding to that, the Yale professor said last week that we are a generally manipulative and deceptive economic environment.
“People can be manipulative and deceptive, I guess we teach that to our children, but what we don’t emphasize is how an economy actually incentivizes that, unless there is a civil society watching, it incentivizes that, it’s a fundamental problem with completely unregulated or unwatched free markets.”
Prof. Shiller is not alone in his dire expectations for the US economy.
Bill Gross, who in January predicted that many asset classes would end the year lower, said US equities have another 10% to fall and investors should sit out the current volatility in cash.
The volatile market reaction to the lackluster US jobs report last week shows that markets, especially stocks, high-yield bonds and some emerging market debt, are trading like a casino, Mr. Gross says.
“More negative numbers lie ahead and if you define a Bear Market by a 20% correction, at some point say in 6 to 12 months, we will have a classic definition of a Bear market, meaning another 10%+ to the downside,” he said.
Have a terrific weekend.
HeffX-LTN
Paul Ebeling
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