Three scenarios that could kickstart a new bull market
As you’ve no doubt noticed, the world’s market commentators, brokers and analysts have turned decidedly bearish. And they have good reason to be pessimistic. But this bear market will eventually end, to be followed by the next bull market. To my mind, there are three distinct economic scenarios that could kickstart the next upswing.
Someone once said, all news is just young people doing old things for the first time. And there is certainly an element of surprise, alarm, and reaction to each data point or central bank utterance, in many of the headlines.
Headlines including, “A US recession appears all but inevitable”, “Don’t be fooled by low P/E ratios”, “Alarm bells are ringing with global markets in growing disarray” and “Shares vulnerable to more pain as recession fears intensify” represent merely a tiny sample from the banner pages of Australia’s major financial newspapers alone. Expand the search globally and we’d be here listing them for days.
What investors need is a game plan, and we’ve recently written extensively offering a framework to help navigate the inevitable vicissitudes that challenge investors from time to time.
So instead of reacting, how about we consider three possible and reasonable economic scenarios and their policy responses.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
