For the last 6 to 8 months people who study investing have said things like, "There likely will be a 10% adjustment down in the stock market in the U.S. when the U.S. Slows down buying treasuries through the Fed.
So, now we are looking at this in real time which might be freaking out some investors who don't study this kind of thing. But, if the predictions are true the bottom likely could be around 15,000. And if this is a bottom it also likely would be a good time to buy because the market is expected to slowly but surely go back up during the year.
However, there are some other things to think about now besides the changes to the Fed like the slowing of the Chinese markets as well. China was a few years ago the biggest thing going on earth money wise. However, just like the U.S. markets got overinflated in 2007 before the Great Recession the Chinese markets got overinflated and could possibly do something like we did then because of it. However, since their economy is more managed like a Business or Corporation it wouldn't look at all like what happened to the U.S. and later Europe.
So, there are many unknowns in the present market and to some degree what happens to the U.S. market is also tied to what happens in China and Europe and other places around the world. So, if you own blue chip international dividend bearing stocks whatever happens worldwide affects international blue chip stocks even if they are based in the U.S.
One of the reasons people invest in blue chip dividend bearing stocks that are international in their investments is they are likely to beat the value of the dollar and inflation over 5 to 10 years on a mostly yearly basis which cannot necessarily be said presently for savings or for bonds, though bonds (municipal bonds that are insured) likely are much better than cash in savings in regard to real time yields. (Especially this is true of tax free municipal insured bonds that are free if you live in the state that the bonds are actually for both state tax free and federal tax free). And because of the potential bankruptcies of cities around the U.S. like STockton and Detroit don't buy municipal bonds unless they are insured with treasuries or some other instrument so you don't lose your principal investment in a city bankruptcy.) So, this is something to be careful of now in the U.S. in regard to Municipal bonds.
However, not having enough out in cash (savings, or other non-bond or non-stock investments) can make people's lives difficult if they aren't prepared for crazy changes like the potential 10% drop to 15,000 during the last few weeks.
So, I guess what I'm saying is the drop to around 15,000 has been predicted for about 6 to 8 months or more around the world by savvy investors. They knew it was coming and prepared for it. They just weren't sure of exactly when it would happen and it appears to be happening now.
The 10% correction is likely happening of around 16,800 or so to around 15,000 and whether it goes back up slowly or further down because of many changes in the world is sort of hard to say at the moment.
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