How bad will the bear market get in the stock market.


How bad will the bear market get in the stock market.

Today 09/16/2022 it looks lime the bear market in stocks is on in earnest but todays fall in share prices hasn't really gotten as bad as I suspect it will get. So far with all the events in Europe, war, inflation, supply disruption hasn't gotten as bad as I would have guessed.

In the United States inflation is running less hot as it is in emerging markets and Europe. I expect inflation in some prices will remain elevated for more time to come and many commodities will continue to fall possibly even oil. My expectation is oil will continue to fall as well as copper and other base metals but a lot will depend on how Europe develops over the next few months.

Already aluminum factors and other end producers of commodities have shut down in Europe because of high natural gas prices, many factories in Germany continue to slow down or shut production down which could cause more shortages and elevated costs for products.

So even id commodity prices come down I don't think the Fed will stop raising interest rates especially if housing rentals and apartment rentals remain high and food prices remain high.

So I continue to believe share prices around the world will fall. So far hiding out in bond ETFs or bonds in general has resulted in 20 to 25% declines, and that has been different this time around. I think this bear market in stock and bond prices maybe like the seventies or even the forties where share prices and bond prices remain low and go lower. Even buying gold hasn't protected you much as you would have thought with inflation at 8 to 9%. 

How to protect your wealth in these uncertain times.

I think this time around buying the dip like many investors have done the last forty years will not be as effective as before, even buying the dip on bond prices has really worked as well as it has in the past and now we may expect bond yields to go to 4 to 5% on government bonds.

We may have a decade where share prices go down or nowhere. 

What I will do is go back to a value strategy that hasn't worked as well as a growth strategy has worked these last few decades. What that means generally is I will buy stocks or shares that pay a dividend and have a low P.E. ratio. In other words what people think of as income shares or value shares. Companies that have dependable income stream with a little growth and not very volatile.

I plan to be in Gold shares and oil shares for the next decade, most of these oil shares I believe will go down in the next year or so will wait to buy them. Same with gold shares, I will buy the large cap ones and the royalty gold shares and not the junior shares.

I will be involved in the uranium markets as of now with the idea as they rally I will sell some and transition into the oil and gold shares again the large caps to small cap's especially the ones with assets IN Canada and North America and some exposure to Africa.

I will also buy what some people consider income stocks, like BTI or British American Tobacco. Or some large cap shares in Brazil like Vale or the oil company their, I maybe a little early to will have small position sizes. Same with shares in South Africa, like the platinum shares all with high yields. 

With the economy slowing down I expect the shares could go down but with a war in Russia they may stay higher priced than I expect. 

I will also dollar cost average in EM shares as the dollar rallies and and those markets get cheaper. I will also have a small position in Utility shares and bond ETFs just for diversification in case inflation really comes down. If that's the case I will sell the bonds for EM shares and some Copper plays and Nichol shares, but again I expect some commodities to continue going down so will accumulate slowly.

The main thing is I will buy conservative income stocks and continue working and dollar cost averaging into these things intel all these things get worked out in the market place and of course the same with a small gold bullion position.

I still believe the government will continue with bad economic policy's so will also live overseas for awhile and start more online business to just in case the E.U. and USA continue running the economy into the ground which is what I expect over the next few years to decade.

Good Luck.