If a Stock Market Crash Is Coming, History Says This Is the Smartest Move You Can Make.
Market crashes happen. But you still can score an investing win.
Overview
The S&P 500 has been advancing through a bull market for more than three years, with artificial intelligence (AI) stocks leading the way. Investors got excited about the game-changing nature of this technology and piled into potential winners early to maximize gains. And this proved to be a winning bet in many cases, considering the double- and triple-digit gains of many AI stocks, from Micron Technology to Nvidia.
But, in recent months, investors have become more cautious about AI and the general market, and this is amid various headwinds. These include the ongoing turmoil in Iran, higher prices in the U.S., and questions about the enormous levels of spending poured into the AI build-out. And just this week, the Federal Reserve increased interest rates for the first time in three years to tame inflation. Higher rates equal higher costs for consumers and for companies borrowing to expand, and that could be bad news for corporate earnings growth. At the same time, the overall stock market remains expensive, with valuations at a level they've only surpassed once before throughout history.
Details
All of these elements have prompted some investors to worry about a potential market crash ahead. It's impossible to predict when the next crash may come, but one thing is certain: Crashes are part of stock market cycles, so one eventually will take place -- even if it's far down the road.
Source
Originally published at www.fool.com.