Experts Say Stocks Are Going To Crash — So What Are You Going To Do About IT?


Last week, my friend Simon emailed me in a panic.

“I just read that stocks are going to crash,” he wrote. “Should I trade my stocks for bonds or cash?”

He linked to a November 6, 2014 article in MoneyNews,Warning: Stocks Will Collapse By 50 Percent. Even the hearts of stoic investors skip a few beats when reading such headlines. Why wouldn’t they? Nobody wants to lose money. And watchful experts have stethoscopes on the heart of the economy.

If they’re predicting a market crash, we should listen, right?

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Read the rest of the article at AssetBuilder

Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School and Millionaire Expat: How To Build Wealth Living Overseas. My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions.

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6 Responses

  1. Shane says:

    A very timely article. Thanks for writing it. I know it sounds silly, but no matter how many times I read the message you’re purveying, it always helps me to come back and read it again and again every few weeks, such is the instinctive yet illogical urge to sit it out and wait for the market to drop before investing.

    Some colleagues and I have recently embarked on our ETF journeys. We’ve had a few discussions about whether to start investing in the S&P 500, given that it’s at a high right now. They’re reluctant to start now, feeling the price is too steep. But I’ve decided to start contributing to it steadily, buying some of Vanguard’s VUSD from the London Stock Exchange every month.

    If I contribute 5000 USD per month in total, 70% of that goes into VUSD and 30% goes into a USD-denominated short-term bond index.

    It feels good to walk around, knowing I own a little bit of Starbucks, Coke, Pepsi, McDonalds, Apple, Google and VISA, et al.

    And if it does happen to crash, I will genuinely be very happy. I currently have a newish – and therefore small – portfolio, an appropriate allocation of bonds, and I make largish monthly contributions. So I believe that in the long-term, despite the potential for occasional nose-dives, the only way is up.

    • Well done Shane. You will likely outperform your friends over time. Few people are wired with the discipline to ignore the media and their own predictions.

      Like you, I would also like to see a market crash. I’m only 44.


  2. Mac says:

    Hi Andrew,

    Thanks for the two books and articles. I am 50 and feel like retiring in about 10 years from F/T employment so I have built my plan accordingly. My Index Funds are in the TSX and have been gaining slowly in the past 6 months until last week when we went into the negative – suddenly and fast! My question is (and I think I know the answer) I was about to invest heavily this week to rebalance my VSB, XIN, XIU, XSP Portfolio. Seems like the dip is an opportunity to do it at a lower rate or do I wait for more dipping! Hmmmm I am never sure when to pull the trigger on purchases since now I feel like I paid too much on some of the past purchases after this dip.


  3. Tia says:

    It was good to read this. I have a chunk of money I’ve been meaning to put into TD’s e-series index funds for a while (after reading your book and other blogs online), but the market bubble is making me so nervous. I would love for it all to come crashing down so I’d feel more confident buying index funds. I feel like I will lose more money in the longterm if I buy the index funds at a high price right now.

    So nope…I still haven’t bought, but I’m assuming I’ll lose more money sitting around doing nothing! Hopefully my rationale is correct on this.

    • Tia,

      If you are nervous, start with the cheapest of the indexes. The international stock market index, by valuation measures, is much cheaper than the U.S. index. On that note, Canada’s index is too. Don’t speculate. Just buy those two. Then add a bond index.


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