How I Knew the Market Would Crash
On Feb. 9, I published an article providing tips on how to prepare for a crashing market. Within two weeks, the market reached its peak and then quickly started to crash, hard, as efforts to contain the spread of the new coronavirus led to large swaths of the economy shutting down. The timing of that article raises a very good question regarding how I knew the market would crash.
The answer to that question is simple: I knew the market would crash because that's what it does from time to time. There's a constant tug-of-war between fear and greed. When greed is in control, the market goes up, and when fear is in control, the market goes down. Ordinarily, the two are fairly well balanced and the market's moves are orderly and calm. Every once in a while, fear gets a white-knuckle death grip over investors' emotions, and the market crashes.
Image source: Getty Images.
Source Fool.com
