The stock market has had a considerable level of success recently, fueling the fear that a crash will occur in 2017 or soon. Although, based on history, there is a higher chance of the stock market crashing each and everyday, some people believe the success the stock market is enjoying hasn’t shown real signs of extreme volatility yet.
However, a major investment expert, Barry James, president of the James Advantage Fund, strongly believes that stock markets across the globe are set for a devastating crash, as a “supervolcano” is ready to erupt. He said the global market was “upside down” and in the “latter stages” of an economic meltdown.
James believes this is due to the fact that share valuations have soared to their second-highest ever level, suggesting that many stock investments are over-bought and could be in bubble territory. The only other time indicators were at this level was before the dot com crash at the turn of the millennium.
According to him:
- Although there were currently good signs, there were vital concerns for the future.
- Companies’ price-earnings ratios, which is used to value their current share price against their per-share earnings, were giving a worrying indication when looking at past experience.
- Even though [the market] looks beautiful, setting new highs, good momentum, and earnings have been coming in good, here are some of the things we’re worried about.
- The market is upside down. In the 18 months ending in June, we saw companies that had no earnings, they were losing money, outperform those that were making money and Tesla is a prime example of that.
- It doesn’t mean that we’ll see a volcanic eruption in the immediate future, and these market peaks take a long time, but we’re definitely in the latter stages of this market advance.
Interestingly, stock markets in both the United States and Britain have continually topped their highest ever levels in recent months. But experts are now worried that history is about to repeat itself.
Note to readers: There is no way to tell when the right time is to invest in the stock market. There could be a crash soon, or it could continue to go up for 10 years. No one really knows. The best thing to do is to research, diversify, invest, and expect that sometime along the way, your investments will go down.
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