Stock Market Crash 2020
I want to talk about the stock market crash 2020 that is going on right now and what you should be doing.
Right now I’m receiving emails and comments where people say:
“You know what? I bought Tesla stock and it is down 20% or 30% right now.”
“My 401K is down 20% or 30%.”
Some of you said that your savings have been dwindling down up to 50%.
How bad is it?
Looking at what is going on in the markets right now, let’s talk about how bad it really is, and if it will get worse.
I also want to show you what to do.
Today is March 11th and this is what is happening:
- The Dow is down another almost 1,500 points, 5.86.
- Yesterday President Trump said there will be a stimulus plan.
- Today the Bank of England cut interest rates from 0.75 to I believe it was just a quarter of a percent.
And yet the market seems to be in freefall.
How much worse can it actually get?
Well, let’s discuss how long it typically takes after a crash until the market continues.
I went to Four Pillar Freedom, which is where I got the following information.
One crash took six years. There’s another one that was three years of recovery. Most of them were close to a year.
The crash in 2000 took us 8 years to recover.
And the 2008 financial crisis took us six years to recover.
So here’s what I did. I looked for the summary and said, okay, this is pretty much 1966 through 2018, the table of how many days it took us to recover.
When doing this, I could see that the more significant the drop, the longer it takes to recover.
- In 2007, 2008, the financial crisis, right? This is when markets dropped by 56% and it took us 1,400 days to recover.
- In 2000, that “dot gone era,” right? Markets dropped 48% and it took us 1,800 days. 33% and it took us 600 days to recover.
- And then in ’73, we had the 48 percent drop.
So as you can see, with smaller drops, it is easier to recover quickly.
So the question is right now, what is going on here? See, thus far, we have fallen 20% over the past two weeks.
That’s where we stand right now, including today, where right now we broke through some key support levels.
How much further can we fall?
If you have a retirement account, you’re probably looking at the statements right now saying, “Ahhh. How much longer? Will we recover quickly?”
Because if you remember, December 2018, this is when we had a drop, but we recovered within a matter of weeks. However, the drop was not very significant.
I believe that the worst is yet to come and here’s why.
There were only two times when the Fed and the Bank of Canada, this is BoC, cut rates by at least half a percent in the same month.
And this was in 2001 and during the global financial crisis. This is when we fell 56% or 44%.
Also, we had the Bank of Australia cut interest rates right before the Fed did it last week as you remember.
And today, we had the Bank of England cutting interest rates.
You might also have heard that the Fed already committed 80 billion dollars to pump into the system.
So, yes, we are talking about quantitative easing all over.
Let’s compare the current sell-off to the massive crashes that we had in 1987.
As you know, this was a big one and 2008. 2008 is probably what most of us still remember, right?
We have been bouncing down and bouncing back.
But compared to these two massive, massive crashes where we are down almost 50%, we are only halfway there.
So this is where the question is.
Right now all governments, all banks around the world are trying to stop this freefall.
Will they succeed? And what can you do to survive in this environment here? Especially if it is getting worse.
With the Coronavirus today, the World Health Organization, the WHO classified it as a pandemic. So it seems to worsen.
Italy right now is in lockdown. In Italy, you can’t leave the house anymore.
And then also we have I believe it is Iran that is hit really, really hard.
We can go over the stats here in just a moment.
So the question is, what do you?
What can you do to survive in this environment?
Stock market crash 2020: You have heard me say this, for years I’ve been saying the crash is coming.
Now is the time to learn how to trade, and here is why you want to do it now if you don’t yet know how to trade.
Know How To Trade
First of all, when you know how to trade, you know what to trade. You know what stocks are the best.
As an example, right now in this crash, airlines are hit hard.
- Airlines are down more than 50%
- Bank of America is down around 50%
- J.P. Morgan, I believe it’s down around 40%
As a trader, it is important to know what to trade because you can make money in a market that is going up when it recovers, and markets always recover.
You have seen the statistics here, it always is happening. And you can also make money if the market continues to go down.
Limit Your Losses
This is super, super important. You have got to limit your losses.
I’m always cringing on the inside when I hear that somebody tells me, “I am in this stock and I lost 15%.”
The other day somebody said, “I lost 15% on Tesla.”
Limit your losses. This is why I say don’t risk more than 2% of your account on any given trade. Because then even if you have five losses in a row, you would only risk 10%.
This is so super important and what I’m teaching my students. If you have been following me for a while, you know that I’ve been preaching this.
When you did this, yes, you experienced a small loss and the market started dipping. But right now, you’re sitting on the sidelines and you’re not suffering more and more losses.
Know When To Take Profits
You need to know when to take profits.
I traded live with my private students last week. So last week we established a short position.
On Monday, you can imagine when we had one of the worst days in history, this short position, meaning or betting on a falling market, was up really, really nicely.
So we took a profit. Don’t get greedy because what happened the next day? Markets bounced back up. And this is what we are seeing right now.
Now, when you do these things you start thinking as a trader, not as an investor. Investors have a “set it and forget it” mentality.
In a moment I’ll share why this is super difficult if you have this mentality.
You have to learn how to become a trader so that you will not only survive in this environment but will thrive in these environments.
Crashes like this offer fantastic opportunities. You just need to learn how to take advantage of them.
This is what to do, how to thrive.
You see, everybody is a genius in a bull market. On Monday when the market when the Dow fell two thousand points, that was the anniversary of the longest bull market in history.
Now, in a bull market, when we constantly make new all-time highs, everybody is a genius, right.
I mean, this when you hear stock tips from your hairdresser, the cab driver, everybody is a genius in a bull market.
Real millionaires and billionaires, they know how to take advantage of an environment that we have here right now.
Let’s cover 5 things you can do right now if you find yourself in these historic times.
Yes, we are making history. Is it a good history? It depends on how you see it.
You can use it as an opportunity or you can just sit there and panic and worry. Do not do this.
I want to start off with a quote here from Warren Buffett.
Warren Buffett said, “Be fearful when others are greedy and be greedy when others are fearful.”
What do you think? What was everyone like when we made new all-time highs? Everybody got greedy.
That’s when you better be fearful and get ready for a bear market like we are experiencing right now.
And now, when everybody else is fearful, this is the time to get greedy. This is the time to take advantage of the opportunities that are right here in front of us.
So let me show you exactly how to do this.
Learn How To Trade
We already talked about it, learn how to trade. And I know you might not have learned how to trade, and right now you might be suffering losses in your retirement account.
The question is, how quickly can you make it back when you learn how to trade? I know that you can make it back quicker than you’re just waiting and holding, right? Because we’ve seen it.
If we go down 40% to 50% it can take 6 to 8 years until the market is where it is right now.
So would you rather make back the money that you might have lost in 6 to 8 years or maybe in 1 to 2 years?
How exactly do you do this?
5 Things You Can Do Right Now Stock Market Crash 2020
Well, first of all, subscribe to my YouTube channel if you haven’t yet.
Recently I have been doing a lot of live streams and posting a lot of videos and articles. I want to keep you informed of what’s happening and how you can take advantage of this.
If you would like to know how I personally trade, I set up a website for you it’s called MyTradingRoutine.com.
This is where I show you how I find the best stocks to trade, how I limit my losses, and when to take profits.
I also show you the indicators and the tools that I use.
Number three, on MyTradingRoutine.com, you’ll see that I’m using a tool, it is called PowerX Optimizer. That tool helps me to find the best stocks to trade.
Now, if you would like to know how this tool works and to see if this is something that might be valuable to you, talk to Paul.
Paul is one of my students that I met almost 2 years ago. He is an aeronautical engineer and had a goal of being able to retire from his current job within the next three years.
Paul has been using this software for quite a while and was able to quit his day job at the end of January, so just two months ago.
I want you to talk to Paul to see how he’s using the software and how I’m using it, he knows exactly how to do this. This is an easy way to see if the software is a good fit for you.
Find ways to take advantage of the opportunity.
Right now, the Federal Reserve is printing money, handing it to the banks and they need to hand it out to the consumers.
I wrote another article for you “How To Take Advantage Of A Stock Market Crash” that shows you exactly what you can do right now to get unsecured lines of credit.
When you use credit the smart way, you can invest it in yourself and maybe even in real estate.
Most importantly right now, don’t panic.
And for those of you who know The Hitchhiker’s Guide to the Galaxy, you get the reference.
Don’t panic, be greedy when others are fearful and be fearful when others are greedy.
These are my thoughts of not only how to survive the stock market crash 2020, but how to thrive in a stock market crash.
It’s never too late to learn how to trade so that you can climb out of the hole if you got into this.
Now, if you are already a trader, I know that right now many of my students are actually making money, which is fantastic.
I love seeing it in our Facebook VIP group where people tell me, “Hey, made money today.” This is great. This is awesome, right? And I want that for you.