BEWARE! FED RATE HIKE COULD BURST BUBBLES KATHY FETTKE
There has never been a slow letting out of air from a bubble. It usually bursts.
Kendrick Wakeman, the CEO of financial technology and investment analytics firm FinMason, told CNBC that
investors are in for a rude awakening. He says no one knows when the stock market correction is coming. But,
he says on average, the stock market crashes every eight to 10 years. And when it does, the average loss is
about 42%.
He told CNBC that stock market investors need to ask themselves: “Would you hang yourself in the closet if the
market crashed and you lost 35 percent?”
I have been warning investors for over a year now that a recession is coming. I’m sure some people think I’m
crazy since the stock market has made significant gains since I gave this warning.
But remember, the same thing happened before the Great Recession and the Great Depression. In January of
2008, Ben Bernanke, the Chairman of the Fed said, “The Federal Reserve is not currently forecasting a
recession.” 9 months later in September of 2008, Lehman Brothers collapsed and the financial markets
worldwide came tumbling down.
The Federal Reserve is supposed to be in charge of
regulating the economy. It’s terrifying that they couldn’t
see that recession coming… and even more frightening
that they may have seen it coming, but didn’t warn us.
Be extremely defensive in your investing strategies
today. Make financial decisions as if it were 2006.
People who were prepared fared very well during the
subsequent recession.
Rising interest rates can be the exact prick needed to
pop the stock market bubble. That may be the very
reason the Fed is raising rates – to slow down the
irrational exuberance that taking the bubble to new
heights.
A slowdown could turn into a meltdown, depending on
how big that bubble has become.