This 2020 is not a financial crisis but an economic crisis

 

 

Financial crisis: mainly occurs in the financial industry, causing default, panic, and reduced liquidity

 

Economic crisis: mainly occurs in the economic behavior of the entire country, the production, supply, and consumption of the entire country

 

It currently looks like an economic crisis, not a financial crisis, will happen in 2020.

The Asian financial crisis of 1997 mainly occurred in a loophole in the Thai financial system, which led to panic selling.

 

The 2008 subprime financial crisis, mainly due to the large-scale default of US housing loans, causing liquidity problems

 

The main impact of the financial crisis is that the financial industry has panic or systemic problems, and then spreads to the macro economy and affects every aspect of everyone's life.
 

The economic crisis is mainly reflected in the chain reaction caused by the stagnation of manufacturing productivity and stagnant sales, which in turn affects the stability of the financial system.

 

What is the United States infinite QE?

 

QE means that after the interest rate is zero, the central bank began to put money into the market in a direct way. What's different this time? In the past, an amount was set, but now there is no amount, that mean the FED will always continue buy and buy government asset, bond, currency, stock , it will not stop, in order to save this economy crisis

 

What is the situation right now?

 

The U.S. stock market is currently collapsing, and the FED is now continue printing more money into the market. Money around the world began to be taxed into dollars and began to flow back to the United States in a frantic manner. The US stock market is now facing a 3 main challenge, Covid 19 epidemic, oil, and trade war. After experiencing the baptism of the trade war, it now ushers in an epidemic situation and stagnates directly, causing the risk of debt default.

 

Falling oil prices have severely damaged the U.S. oil industry. Since then, the U.S. oil industry has relied on issuing bonds to maintain it.

 

As of now, the market is also confused, and the "experts" don't know what happened. Everyone knows that it will fall, and everyone knows that it will continue to fall, but everyone has no bottom. No one knows where that bottom line is. These factors are superimposed on each other, influence each other, policy influence, countermeasures of countries in the world, and the economies of countries in the world ...

 

Is the dollar returning now to hedge? Or for the bottom? 

 

What we are facing now is a century-old situation, which may not happen in our lifetime again.

It is also the most turbulent time in the world. There is no person in the world can predict what will happen next. We have no idea how long this volatility will last, nor does anyone else

 

What should we do now?

 

While the market average has come off its lows from earlier this month, it is still firmly entrenched in a bear market. Likewise, most stocks are mired in heavy losses from the recent weeks of virus-related panic selling. These stocks have not yet recovered or had the time to form strong base patterns with clear buy points.

 

Rather than try to nail the bottom amid the stock market crash, observe the market closely for a follow-through signal, which tells you the market has confirmed the start of a new uptrend. And in the meantime, get your watchlist ready to go with top stocks that are geared toward successfully breaking out from a good base pattern.

 

But which companies should be the choice of watchlist? Blue chip stocks, Blue chip stocks are more well-established – well, not all. We should target on the Blue-chip companies with potential of future growth, strong business sustainability with great cash flow. 

 

It's wise to leave your investments alone for the foreseeable future and stick to your long-term plan. Hold fast to your goals and stay the course. Set your emotions aside and stick to your long-term plan. One thing that the 2008 recession taught investors is that it is better to have an investment strategy and stick to long-term goals. Uncertainties will always be there, but they will wear off with time. Emotional buying and selling will distract you from the strategy of building wealth. A slow-and-steady strategy will ensure that you meet your long-term financial goals.

 

Stock investing is not risky. It’s buying shares without knowing what you’re getting into that is risky. It is this lack of knowledge that kills many sincere investors who just want to make money in the stock market.


 

 

 

 

Louis Yap

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