'Downtown' Josh Brown: 15 Things That Might Happen If The Market Loses 20%
"Downtown" Josh Brown, CEO of Ritholtz Wealth Management and CNBC contributor, penned a commentary on what investors can expect to happen to stocks if the market tumbles 20 percent.
The last time the S&P 500 index tumbled 20 percent from peak-to-trough happened in October 2011. More recently, the median S&P 500 stock lost 25 percent from 2014 through 2016, but this fell under the radar since the major stock indices weren't hurt enough to be classified as a bear market.
Nevertheless, should stocks fall 20 percent, Brown says the following could happen:
- 1. Vanguard, a massive investment management firm with trillions of dollars in assets under management, will feel the pain and see an outflow of up to 15 percent.
- 2. Financial reporters will be fixed on reporting on the "terrible" performance of large robo-adviser firms while Vanguard and its peers will be "under the microscope."
- 3. Paul Singer's Elliott Management hedge fund will "be the new hedge fund It Girl."
- 4. Warren Buffett will "look like a genius" and put some of his $95 billion cash hoard to work.
- 5. A "doom-saying charlatan" who has been predicting the market crash for close to a decade won't gain as much attention as they would have years ago.
- 6. Financial advisors will find it hard to convince clients to hold on to their assets.
- 7. Tactical strategies will "come back into favor."
- 8. SPDR Gold Trust (ETF) (NYSE: GLD) will "explode" while iShares Barclays 20+ Yr Treas.Bond (ETF) (NASDAQ: TLT) will be the "new momentum trade."
- 9. President Trump will publicly call for Janet Yellen's head and accuse the Federal Reserve of hurting the stock market to influence the 2018 midterm votes.
- 10. The Japanese yen will surge to the upside versus the euro.
- 11. Peter Schiff and others will be "brought back on to the mainstream financial" television networks.
- 12. Long-short hedge funds will be saying in letters this is the "I told you so moment."
- 13. Some ordinary investors will listen to the worst advice available.
- 14. Other ordinary investors who don't listen to the worst advice will stay the course and think of the longer-term and bigger picture.
- 15. Yet again financial pundits will argue that buy and hold is dead.
See Also:
Strategist: Watch Out For These 3 'Clear-Cut' Bearish Signs In The Market
Berkshire Could Hoard Cash And Complete 4 Different $100 Billion Deals In The Next 10 Years
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