Cash is Queen!
Best you cash in on your long term investments, because we could be in for a very rough ride down!
In fact, we could see the market collapse a staggering 40% in the next couple of months!
Here we go again!
This Index predicted the two biggest crashes of the last two decades
The Index I was looking at is the FTSE Index…
The FTSE Index (Financial Times Stock Exchange), has 100 of the biggest companies on the London Stock Exchange (LSE).
And over eight shares on the FTSE alone, are dual listed on the JSE.
So, when the FTSE collapses, it is safe to say that the Johannesburg Stock Exchange follows along.
Don’t believe me?
Let’s take a look at this chart so you can see what I see…
Three peaks and three crashes?
You can see that the FTSE has been bouncing up and down a range between Red line 1 at 6890 and Red line 2 at 3624.
For the last 14 years, it’s failed to break above this level and make new highs.
People love round numbers when investing in the stock exchange. They often base their decisions on these psychological levels.
So when the FTSE reached these levels around 6890, panic kicked in which lead to the market crashing down a staggering 47%.
Not once but twice in over 14 years!
The first time was in 2001 with the Dot Com crash.
And the second crash took place in 2008 when the Financial Crisis hit the markets.
Well we’re at these levels again, and so this should send warning bells to you… In fact, it’s at the level where a market crash could be looming once again.
I am going to take a guess and say it will because of global debt issues, but we’ll save that discussion for another day.
So watch this 6890 level carefully!
Because if it does not go above this level, we could be seeing a market crash of another 40%
As Karl Marx says,
I couldn’t agree more!
So what can you do to protect yourself if the crash comes?
If you’re an investor, then you should be watching this 6890 level very carefully.
You should always think of ways to protect yourself from portfolio obliteration.
With smart money management rules, you shouldn’t be risking more than what you’re willing to lose.
So, here’s what you can do…
Look to only risk 5% of your portfolio in any one share.
Let’s say R100,000, this means you’ll only risk R5000 per share.
So, if there were to be a market crash, you would be protecting a huge amount of your hard earned bucks!
You want to always keep strict to money management measures when you’re getting involved in the stock market.
This will help protect your portfolio from going bust, no matter what happens!
Click here to sum up everything you need to know about Moving Averages and how you can use it to better your trading in under two minutes!
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“Wisdom Yields Wealth”
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