Dear readers, US stocks retreated significantly yesterday. Dow Jones, S&P 500 and NASDAQ Composite was down respectively by 2.38%, 2.81% and 3.95%.
The main reason cited was investors’ concerns over US Big Tech earnings, though there may be other concerns too weighing on the stocks markets.
Magnitudes of such drops of the US stock markets have become common in recent times. And they are no longer surprising.
The stock markets have become more volatile and since the great stock markets meltdown in 2009, the worst the global stock markets have experienced was in March 2020. Straits Times Index back then was 2,233 compared to 3,322 (an almost 50% increase) as of yesterday (26 Apr 22).
Investors said Mar 2020 was the meltdown after the 2009. I personally do not think so. My personal take is that there will be a next financial meltdown and what investors are seeing today are just lead-up to this next financial meltdown.
While some advocates have been urging many not to put much of your portfolio into cash as inflation erodes the purchasing power of cash, I really urge all of you to start building or continuing to build up a war chest so as to take advantages of the next financial meltdown which always come when no investor expect.
Cash is King when stock markets correct!