At this current stocks markets backdrop, there are a number of uncertainties. Be it trade wars, US-Iran developments, US-North Korea developments, Brexit, US Federal Reserves, an investor now has a number of reasons to be cautious on his investments. Coupled with the fact that the global equities markets have had a bull run for almost a decade, it seems many investors these days are somewhat guessing whether a stocks markets corrections is due soon.
Somemore, beneath the oft-cited macro developments above, there are a number of companies around the world which have filed for bankruptcy or have effected a downsizing of their business operations. In a nutshell, all the signs are now pointing to an increased likelihood of a stocks markets recession to come.
In my personal opinion, it is not whether a stocks markets correction will come. It is really when the stocks markets corrections will come. I am saying this because it is a fact of nature that stocks could not go on a bull-run forever, just as we have the four seasons: Spring, Summer, Autumn and Winter.
As such, I believe smart investors are those who recognise the fact that all signs are pointing to a possible stocks markets recession and then after they have done so, smart investors will prepare for the stocks markets corrections. Preparations not only mean that they would avoid much of their portfolio in equities which will be stuck when the corrections occur. Preparations also means that investors turn to looking at opportunities arising from stocks markets corrections. This means to have cash ready so that investors with the cash could be Kings when the stocks markets correct eventually. Since investors could then choose to invest at one of the bottoms of the markets corrections and reap good returns when the stocks markets go up once again.
As such, I have been busy liquidating some stocks to free up liquidity to build into a “war chest” for use at the right time in investing.