I guess there isn’t “always a bull market somewhere”!
Jim Cramer just advised people to get out of the stock market saying that stocks might lose 20% this year. Isn’t it a bit too late for that prediction? The Dow Jones Index is already down nearly 25% for the year. Telling people that stocks might lose 20% is like telling people with the flu that they might fall sick!
“I don’t care where stocks have been, I care where they’re going, and I don’t want people to get hurt in the market,” Cramer told Curry. “I’m worried about unemployment, I’m worried about purchases that you may need. I can’t have you at risk in the stock market.”
Where was Cramer a few months ago?
But casting aside my skepticism for a second, he actually does have a valid point. He says you should only invest what you won’t need for 5 years. However, this advice is always true, not just for the current scenario. No one really knows what the market will do over 5 years, so investing for at least 5 years helps you ride out any volatility. At least, that’s the theory. If you had invested $1,000 in the Dow Jones Index exactly 5 years ago, you’d be up a whopping $40!
I’ve actually put in a buy order for some shares this evening for tomorrow morning:
ERF – a canadian royalty stock that yields over 15%
BRK.B – a baby Berkshire share. It’s shown great resilience in this market.
EDD – an emerging market government bond fund that yields 20% and is 40% below its Net Asset Value. Even if there are 40% defaults, I should theoretically get my investment back.
CDE – a silver mining stock whose share price has been beaten down next to nothing. I would’ve bought a gold mining stock, but I’m very heavily weighted towards gold and under-weighted with regards to silver.
I had the cash lying in a retirement account and I used 33% of it to make this order. I definitely won’t be accessing this money for a few decades so I think I’ll do well on them in the long run.
Note: These are not recommendations to buy any stocks, even though my passive income is decent, my portfolio returns for the year are pretty dismal. If you buy these stocks and lose money, I will only laugh at your foolishness!