Bill Gates and Warren Buffet have gone to social media saying we will have another financial crisis like in 2008.
As we lead up to the midterms, the mainstream media, along with some private analysts and the Federal Reserve claim that despite a robust economy, we’re headed for a crash.
Historical trend experts balk that U.S. growth has just peaked coming off the Department of Commerce’s report that U.S. gross domestic product’s growth in the third quarter was one of the best six-month stretches for the U.S. economy in the past decade.
The Trump Administration finds faster growth is evidence that consumer spending has picked up, thanks to tax cuts.
Walser Wealth Management Principle Rebecca Walser said while a major correction is in the future, she doubts this is the start of it.
“The tax cut also that went into effect the beginning of the year, and the impact that that has had—what people are starting to say, ‘Are the results that we’ve had for the last 18 months sustainable and can earnings stay where they’ve been?’,” said Walser.
Others said a strong household saving and low unemployment will prevent a sharp drop-off.
Walser said it shouldn't be too much of a concern for people in their 20s, 30s, 40s and early 50s.
“When the correction does come, which we just don’t believe that this is the beginning of it, but it could be, but when the correction does come, we do see that the market will again have another 50 percent correction, like it did with the great recession in 2008,” said Walser.
She said people who are 10 years out from retirement can't afford a big market correction in their portfolio, so they need to have a plan in place. Walser tells her clients to move to cash, hold on to securities through the correction and buy back in when the market bottoms out and ride the gain back up.
Tech has been big this year and especially the FAANG stocks--Facebook, Apple, Amazon, Netflix and Google.
Historically, October tends to be turbulent before mid-term elections due to uncertainty. The market dips just before an election and then recovers.