Ted Bauman: Take Caution In US Stocks

Many analysts have made predictions about the stock market crashing and so far, they have all been wrong. However, it is almost the longest bull market for US stocks in history and fear is beginning to grow that this bull market is about to come to a halt. Ted Bauman is a famous economist who feels there is a fifty percent chance of the stock market crashing soon. Mr. Bauman is an editor for Banyan Hill Publishing who advises his subscribers to adopt a low-risk investing strategy. He earned his economics degree while living abroad. Much of his written work has been published in respected journals worldwide.

Ted Bauman advising his subscribers to take a defensive stance regarding their financial portfolios because he feels that eventually, the stock market is going to make a sharp decline.While the bulls still control the bears in the US stock market, about Ted Bauman, he is not alone in sounding the alarm about the current state of the US stock market. He uses the CAPE ratio to determine how undervalued or overvalued equities currently are. According to the ratio, the US stock market has only been more overvalued than it is now one time in history and it was during the dot.com bubble. If the ratio were to return to its fair value, the S&P 500 would lose close to forty percent of its value.

Another possible crash scenario for US equities that Ted Bauman believes could unfold is a repeat of the famous Black Monday. The stock market had its largest one-day decline in history and took everyone by surprise. The majority of traders freaked out and sold all their positions trying to preserve capital. This proved to be a bad decision because the stock market immediately bounced back in the coming weeks and those who did not panic made a ten percent rate of return. Ted Bauman feels that now is the best investment time for investors to focus more on preserving wealth rather than sky-high gains. He advises investors to hold bonds and to look for undervalued equities outside the US, such as Chinese equities.