People all over are talking about a possible looming pull back in the stock market, and Ted Bauman wants investors to know how to protect their assets during downturns in the stock market or full-on recessions. He believes we are currently living in a time where another recession could be on its way. When the future of the stock market is uncertain, Bauman wants people to be aware and educated. He has been an editor with Banyan Hill Publishing since 2013 and writes the Bauman Letter, which offers investors practical advice about how to protect their money and more.
Ted Bauman believes that rule-based selling could part of the reason why the market may crash. He has noticed that stock trading software tends to steer investors towards opportunity-cost selling. When Black Monday took place in 1987, it was due to rules-based selling. At the same time, investors who were able to scoop up stocks at a discount made a pretty penny that same year. Investors that didn’t panic also made out well as the market was up by close to 10 percent by the year’s end.
Ted Bauman believes that investors should continue to stay alert and on their toes because many stocks are completely overvalued at this time. He is sure that a recession could drop the S&P 500 by as much as 30% and that asset protection is a must. He has pointed out that many investors ignore bonds but that they can serve as a protective wall in uncertain times. While a stock can go down in price dramatically overnight, bonds usually don’t do this. Bond investors also get to collect dividends. Some people may wonder why they shouldn’t invest in dividend stocks over bonds to receive a cash flow, and, again, Ted Bauman has revealed that bonds usually stay much steadier during a bear market. Instead of investing solely in bonds, Bauman encourages investors to consider looking into, both, bonds and stocks. Doing so can help to build a well-rounded portfolio that can stand solid during a crash, and this is exactly what he hopes his readers will continue to focus on.