I went 100% cash last week.
It was a unique situation where global indices had already crashed, but China A-shares were just off prior highs. But cmon, contagion—if the West stops buying, CN demand will get hit. So only a bit off the highs I sold everything, take the gains, pay taxes. Screw it, did that in Q4 2007 too. Sometimes it’s time to pull the trigger, buy it back later and lower.
This is going to be BIG DAMAGE for months, at least. The U.S. financial system is vastly weaker than people realize. The Fed with their emergency rate cut to zero and QE4 signal that. They don’t have control of this ship anymore, and they know it. Govt is going to frantically and desperately throw everything they have at it.
I say S&P500 to 2000 (41% decline to 15X “as reported” P/E), but 1500 is possible. Trump is finished. And it will be years of repair, like Obama era “everything is fine folks” before they can prop the system back up.
Risk of global war just increased.