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What I’m about to say may sound totally crazy at first. But keep reading, because I think you’ll agree that it’s dead-on accurate.
There’s a recession coming.
Chicken - Little - Sky - Statement - Fact
No, that’s not some Chicken Little “The Sky is Falling” statement. Far from it. It’s just a fact: economies and financial markets always go through boom and bust cycles.
There are good years and lean years, up years and down years.
National - Bureau - Economic - Research - Fact
According to the National Bureau of Economic Research, in fact, the average length of the ‘good period’ in which the economy expands during this up/down cycle is 56 months.
That’s followed by an average 11 months of economic contraction, upon which the whole cycle starts again.
TEN - Years
Well, it’s been TEN good years now.
After the worst crisis since the Great Depression wiped out trillions of dollars of wealth around the world, most developed economies hit bottom in March 2009… and then started slowly inching their way forward again.
Months - Expansion… - World - Way - Correction
So that’s technically 119 months of economic expansion… which means the world is way overdue for a significant correction.
Even if you ignore economic history, there are signs everywhere.
Asset - Class - World– - Stocks - Bonds
Nearly every major asset class around the world– stocks, bonds, real estate, etc.– is selling near an all-time high, and being priced at levels that just don’t make sense.
The US stock market’s Price-to-Earnings ratio, for example, which is a measure of how much investors are willing to pay for every dollar of a company’s profit, has rarely been higher.
Stock - Market - Ratios - Price-to-Revenue - Price-to-Book
Other stock market ratios, like Price-to-Revenue, Price-to-Book, Cyclically-Adjusted Price/Earnings, have rarely been higher.
Even Warren Buffett’s preferred metric, which measures the value of the entire stock market relative to the size of the economy, has only been this high one other time in history– just before the dot-com bubble burst in 2000.
Way - Stock - Market
Just about any way you slice it, the stock market is overvalued.
It’s the same with bonds, whose...
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The truth fairly and honestly presented, will be spun as a lie by a politician.