2023 Stock Market Crash! How Low Will Stocks Go?

Описание: The stock market crash is back but how low will stocks go and how should you invest? I'll share my strategy for investing in 2023! Join the Community for extra perks and access! https://mystockmarketbasics.com/BowTi...
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Stocks are down more than 5% from the January rally but could have a lot further to fall as the stock market crash reignites. I’ve been skeptical of the recent rally in stocks and noted in January that plunging estimates for corporate earnings and the potential for persistently high inflation should be a reason to hedge downside risk of a return to the bear market. Stocks in the S&P 500 are now down 5.3% from the February 2nd intraday peak and could have a lot further to fall.

This week, I’ll walk through three reasons why stocks could still be heading lower and then discuss my investing strategy to take advantage of lower prices.

I pointed out in January that inflation readings would likely start disappointing with price pressures not coming down as quickly as the market expects. This month’s CPI, PPI and PCE all showed inflation more persistent and brought back the Fed’s need for higher rates to slow the economy. In fact, stocks fell a percent or more on each day of the inflation reports this month; falling 1.05% Friday on the PCE report, down 1.4% with the PPI report on the 16th, and falling 1% intraday after the CPI report before closing flat.

Earnings come to a close in the week ahead but individual stocks remain risky around their earnings dates. Investors have punished stocks to the tune of double-digit price selloffs for any miss on earnings or weak outlook for the year. Combine this with the general trend of the market to continue lower on fears the Fed will increase rates too far and investors should consider hedging some of their positions.

Stocks jumped late last year on the idea that the Fed would slow and then stop its interest rate hikes but we have never seen a bear market low until the Fed stopped raising rates and many bear markets haven’t been over until the Fed started cutting rates to support the economy.

Nobody likes listening to a bear but investors need to face reality and adjust how they invest. Even long-term investors that buy stocks each month without worrying about timing might consider keeping their monthly deposit in cash until the market shows signs of improvement.

This isn’t about market timing or calling a bottom but about understanding where you would be comfortable buying for long-term returns and having a plan so you don’t stress out as the market drops.

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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.