TIn a recent article that he published through Banyan Hill Publishing, economist Ted Bauman addressed the next stock market crash. Nobody knows when this will occur but it will happen at some point. Ted Bauman believes it’s a 50/50 proposition between the market continuing as a bull market and it pulled back into a bear market. Ted Bauman has pretty valuable advice about investing and the global stock market given his experience. He was born in America and moved to South Africa so that he could attend the University of Cape Town. He majored in both history and economics and then moved on to a prolific career in the nonprofit industry. He helped these organizations most effectively manage their money while building low-income housing.
These projects helped a lot of people get out of the slums and into affordable housing. It was while he was living and working in South Africa that Ted Bauman developed his great philosophy of low-risk investing. He says that shooting for the moon as an investor will only pay off for the extraordinarily lucky and end in disaster for everyone else. For the rest of us following a careful, conservative strategy will lead to steady gains that set people up for comfortable retirements. He sees three ways that the next stock market bust will play out.
As most investors know that the current U.S. stock market is pretty overvalued. He says if it’s just a simple pullback to where stocks “should” be then we can all expect a drop of 35 percent. There’s another scenario at play where the short-term yield of bonds exceeds the intermediate-term of bonds. If this happens then the bond market expects little to nothing from stocks in the next ten years. If this plays out then Ted Bauman expects the stock market to drop by 25 percent. The last possibility is a big drop followed by a bounce. This is if there’s really nothing wrong fundamentally with the economy and it’s just one of those things. If this occurs then he thinks the stock market will collapse by about 18 percent.