How To Avoid The Coming Stock Market Crash – Part 1

Ike IkokwuWritten By: Ike Ikokwu, CFP, CPA, CTC, MSPFP in Atlanta, GA

It’s an extremely exciting time to be an investor; that is, assuming you are currently invested in the market.  As I write, yesterday, November 18, 2013, marked the first time that the DOW crossed 16,000.  Not to be left behind, the S&P 500 also hit a major mile marker as well, crossing 1,800 for the first time.  And the good news is that the party isn’t over, since it’s only the middle of November.  With all of the 4th quarter shenanigans Wall Street is notorious for doing to prop up the markets, and a FED that is intent on infusing more capital into our economy with their epic bond-buying campaign, there’s bound to be some more upside to these markets before year end.  Again, that’s the good news.  But what’s the bad news?

The bad news is the party’s going to come to a “crashing” end soon (pun intended).  Exactly when you ask?  Unfortunately, my crystal ball for market predictions stopped working back in 2000 when I lost a fortune in the stock market.  So, I can’t tell you exactly when.  What I can tell you is there’s a major disconnect with the meteoric rise of the stock markets since the 2008 bear market and the extremely slow exit out of the 2008 recession we’ve seen in our economy.  There’s a plethora of technical indicators that also tell us the market is past due for a major pullback of sorts.  And then, there’s good old common sense that says stock markets can’t go up forever… even if that’s how it’s felt since the market bottom of March 2009.

One study also cites trends within stock market cycles and shows that bear markets tend to happen every 5 to 7 years and if you look at our recent market history, the first bear market of the 21st century was from 2000 to 2002. For 5 years in a row, the markets rose from 2003 to 2007, when we were faced with our next bear market, which began in October of 2007 and ended in March of 2009.  After that market bottom, the markets have risen for another 5 year stretch from 2009 to 2013.  I’m not much for playing Russian Roulette, but if you’re holding a gun with 6 bullets in it and 5 of them have already been fired, are you willing to take the chance on the 6th one?

My point is not to predict when the next market crash will occur.  It could be in 2014 or it could be in 2015.  My point is you don’t have to be a market guru to figure out one is on the way and so there lies the question:  What will you do when it arrives?  How do you avoid the next stock market crash?  With my response to this question, I know I’m certain to dazzle you with my brilliance.  After years and years of study and research, I’ve figured out a way to avoid market crashes and it’s really pretty simple.  Are you ready for this?  OK.  Here it goes:  Don’t be invested in the thing that’s going to crash.  There you have it: 20 years of investment research, blood, sweat and tears.

Now I hear an objection brewing.  Come on, let it out.  OK – I’ll voice your objection for you.  You’re wondering: How in the world can you achieve your financial goals if I’m telling you to avoid, or not be invested in the stock market? What if you could accomplish your financial goals without having to be invested in the stock market?  Please note: I’m not one to discount the opportunity the stock market presents to grow your wealth and achieve your goals.  All I’m saying is if it’s too hot in the kitchen and you don’t like getting burned, why not just stay out of the kitchen?

I know it seems contradictory to human logic but what I’m about to tell you is that you can have some opportunity for growth in your accounts without sacrificing safety.  It has been said that the return OF your money is more important than the return ON your money.  If what you are looking for is the opportunity to secure the return OF your money while still getting some return ON your money, then there’s a way to have exactly what you are looking for.  In Part 2 of my write up, I’ll reveal how a financial tool endorsed by well-known celebrities like Ben Stein, can help you do just that.

About the Author:

Best Selling Author and Financial Strategist Ike Ikokwu gets it.  He’s walked through the same fire that most of us are walking through right now – the disappearing nest egg, the investment returns that never happen, and the house with the white picket fence that’s worth less now than it was when we bought it.  Through experience, education, and a lot of hard work, Ikokwu has survived the American Dream turned financial nightmare.  He has discovered that most of us are following 9 specific financial myths he calls the “Mom and Dad Plan,” and these inadvisable, yet staple, beliefs have us on a collision course with financial disaster.  For access to his best-selling book and other financial products to help you avoid the collision course with financial disaster, visit him on the web at www.ikeikokwu.com.

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