As we start the new year, a sizable market correction is upon us.
Last week was one of the worst weeks in the US markets, with many stocks down more than 10%.
The crypto market fared even worse, with Bitcoin currently at 35K.
As more expectations of the US interest rates rises (3 expected this year), and Fed tapering by March, it is quite expected that markets are getting very jittery.
In fact I’m of the view that considering that the US basically printed 40% of extra USD in circulation in the last two years alone, the US has definitely a lot to pull back on.
This means that with its tapering, the market is purely left to market forces PLUS the Fed taking money out of the system. Which means a chunk of money in stocks surely exiting.
Does this mean the market is sure to drop for the next few months?
I unfortunately think so.
Stay safe, and hold cash.
The best trade in the second half of this year might just be a high yielding fixed deposit.
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