Why You Should Be Buying Into This Sell Off

Four Reasons Market Go Into Panic Mode                                                                                                                                                                                                                                                                                                                                                                                                                 August 09, 2024 | [Listen Online]( | [Read Online]( [Teeka Tiwari]( [fb]( [fb]( [fb]( [fb](mailto:?subject=Post%20from%20The%20Digital%20Asset%20Daily&body=Why%20You%20Should%20Be%20Buying%20Into%20This%20Sell%20Off%3A%20Four%20Reasons%20Market%20Go%20Into%20Panic%20Mode%0A%0Ahttps%3A%2F%2Ftiwariresearchgroup.com%2Fp%2Fbuying-sell-off) Why You Should Be Buying Into This Sell Off For many Americans, it seems like we’re in the middle of an economic crisis. And I can’t blame them for feeling that way… On Monday, we saw the biggest U.S. stock market rout since 2022… Japanese stocks saw their biggest crash since 1987... Bitcoin saw its worst performance since the FTX implosion in 2022. Even safe-haven assets like gold were in the red. Abroad, many fear Israel’s recent assassination of the leader of Hamas in Iran could spark a wider war in the Middle East… Or even worse, a nuclear conflagration. I know it’s hard not to feel fear and uncertainty in times like these. But my primary message to you is this: Don’t panic. We’ve been through this before. If you were around in 1990, you remember the first Gulf War. At the time – in terms of global impact – the economic effects of Iraq’s invasion of Kuwait were more severe than what we’re seeing with Israel and Iran. Oil prices doubled virtually overnight. Interest rates were around 9%. And about a year later the unemployment rate was nearly double what it is today. We were still feeling the effects of the savings-and-loan crisis that would end up costing taxpayers over $1 trillion (in 1990’s dollars). Just like now, it was painful being an investor in 1990. I know because I was a young executive on Wall Street at the time. We saw the market crash 20% from its July 1990 high to its October 1990 low. Talk about pain. Here’s why I’m telling you this… Over the past five years, I’ve helped everyday people win back decades of wealth they’ve lost from economic meltdowns like the dot-com crash… the Great Financial Crisis… and the COVID-19 pandemic. And I’ve learned that you don’t panic and sell world-class assets during a crisis. Instead, you look for the opportunity. Four Reasons Market Go Into Panic Mode I’ve been covering the financial markets for over three decades. And what I’ve learned over the years is that, sometimes, you have to run into a burning building if you want to find the best opportunities. It’s like setting off a firecracker in a packed stadium. It can spark pandemonium as the crowd stampedes to the exit. Many of the events that spark fear in the markets are like a firecracker. They’re loud… but only last for a moment. And the damage is minimal at worst. Now, don’t get me wrong. There are absolutely times you’ll need to sell. Like back in 2007, when it was obvious to me the subprime real estate lending market would cause a financial crisis. But today we face nothing like that at all. What I’ve found is that most crises are either overblown or fleeting in nature. In my view, there are only a few events that truly rattle markets. They can be classified under four categories: War, recession, economic slowdown and financial crisis. While these four categories are interconnected (wars can cause recessions and financial crises can lead to wars) – each can be a catalyst for a major correction on its own. Let’s start with war… War is a broad category. So I won’t get into all the legal definitions here. Let’s just define it as a prolonged armed conflict between nations, states, or parties. Right now, one of the biggest overhangs in the market is the escalating tensions between Israel and Iran. Last week, Israeli forces killed the leader of Hamas, who was on a visit to Tehran. Iran and Hamas have vowed to retaliate. Some fear the United States and Russia could be dragged into the regional conflict, sparking a global shooting war. Now, the outbreak of World War III is a very real concern that I won’t dismiss. The possibility exists, but it’s remote. If the war in the Middle East does expand, though, it won’t be to our shores. And outside an attack on U.S. soil, I don’t believe we’ll see a market crash. Remember, the Afghanistan War lasted two decades – the longest in U.S. history. But because the hostilities were abroad, it didn’t derail the economy. So if you’re panic selling solely on fears or rumors of war, then you’re making a terrible financial mistake. The other current overhang is fear of a recession. Last Friday, the Bureau of Labor Statistics released its monthly report. The number of new jobs in July came in lower than expected. And the unemployment rate shot to its highest level since October 2021. That report sparked fears the country is headed into a recession. Generally, an economy enters a recession after two consecutive quarters of negative gross domestic product (GDP). So are we in – or about to enter – a recession? My answer is… I don’t think so. Sure, there are pockets of weakness here and there, as indicated in the jobs report. But the economy is actually quite strong. We haven’t had two quarters of negative growth since February-April 2020 – the height of the COVID-19 pandemic. According to the Atlanta Fed, GDP growth for the second quarter of 2024 came in at 2.8%. And it’s expected to grow 2.9% this quarter. Friends, I know recessions sound scary. But they aren’t the horrific boogeyman that Wall Street makes them out to be. They're certainly not fun to live through. But they’re inherent to capitalism. You're going to have boom and bust cycles. That’s just the nature of the system. The final two events that can rattle markets are financial crises and economic slowdowns. A financial crisis is like contagion. It happens when the crash of one sector of the economy infects the traditional financial system with crippling financial losses. This then drags down the entire market. The scary thing about financial crises is that they can spin out of control and plunge the economy into a years-long bear market. We saw this during the subprime mortgage crisis in 2007, which collapsed the housing market and kicked off the 2007-09 Great Recession. I don’t have a crystal ball. But I don’t see any major financial crisis happening this year. Of course, there’s always the chance of black swan events that no one can predict – like the outbreak of a global pandemic. So we can’t dismiss the possibility. Now, let’s get to the final cause of market downturns: Economic slowdowns. In my opinion, this would be the most likely cause of a market downturn this year. But I still think it’s unlikely. An economic slowdown isn’t the same as a recession. It just means the rate of growth is slowing. That’s different from the negative growth we experience during a recession. Could we have an economic slowdown? Sure. But again, would it be enough to derail the economy and the current bull market in stocks? No. Banks appear to be in good shape with no immediate threats to their overall profitability. Interest rates and the rate of inflation are coming down. And although it’s cooling, the job market is still robust with unemployment relatively low. A slowdown would put a crimp in the markets. But it’s the equivalent of a speedbump on a racetrack to higher gains. How to Take Advantage of the Panic Friends, the worst thing you can do right now is throw your hands in the air and sell your quality crypto and stock positions. Don’t. View this sell-off as an opportunity. Just buy the dip and let the panic wash out. Since Monday’s lows, the S&P 500 is already up 4%. And bitcoin is up 22%. I’ve lived through these scary moments before. And if you keep your wits about you, you’ll come out the other side better off than you went in. We saw this when bitcoin crashed more than 50% during the COVID-19 pandemic. So many people liquidated their positions at the bottom. Meanwhile, I pounded the table to buy more. Bitcoin rocketed from a low of $3,782 during the depth of the pandemic to all-time new high of $69,000 in November 2021. Friends, I can’t say it enough. Don’t compound the stupidity of others by being stupid yourself and panic selling into fear. Stay calm. Be rational. The bull market is still intact. That means you buy into weakness. If the market is freaking you out that much, turn off the computer and go enjoy your life. The sun will shine again… and we’ll hit new highs. Let the Game Come to You! Big T P.S. At Digital Asset Daily, we want to hear from you. So if you have any questions or comments, please email them to us at jointeeka@tiwariresearchgroup.com Share The Digital Asset Daily You currently have 0 referrals. [Click to Share]( Or copy and paste this link to others: [ [fb]( [tw]( [ig]( [yt]( [in]( Update your email preferences or unsubscribe [here]( © 2024 Tiwari Research Group 1607 Ponce De Leon Ave San Juan, Puerto Rico 00909, Puerto Rico [Terms of Service](