2018: Things To Come for Stocks, Cryptocurrencies, Gold & Silver – Mike Maloney
When trying to look into the future, it’s best to use the lens of history, according to Mike Maloney. Low volatility could be the quiet before the storm as reported by a Yale expert economist. In the last 20 years, the VIX volatility index for stocks has seen record lows in an extremely short period of time, in just the last 2 months.
Many people are speculating that the Federal Reserve and the government are actually shorting the VIX in order to keep the VIX price down. The VIX is a measure of how unstable the markets currently are, and allows traders to invest in another instrument though it can be identified as a warning signal as well.
The VIX tells the tale of how retail investors get slaughtered by the big guys on Wall Street
Because the VIX is showing such a lack of volatility, or at least it was until the end of January when the market dropped 3,000 points, that’s when most investors should be taking action in the opposite direction of the herd, according to Mike Maloney. The current streak of low volatility is a telling indicator that people should prepare for a market correction. Matched with a lack of market pullbacks and the P/E ratio of stocks hitting near all-time highs, the market is looking like less of a safe bet every day.
The fair value of a stock i.e. a reasonable price-to-earnings P/E ratio for a stock is 12 to 15 times revenue for the price of a share of stock.
We have not visited the undervalued area for stocks, not even close, yet.
Mike Maloney predicts that the Federal Reserve’s stimulus and artificial propping up of the stock market with zero % interest rates, the lowest in history, will ultimately become ineffective very soon, and the market will reverse to fair value.
So What is Undervalued? Cryptocurrencies and precious metals
At this time it will be very advantageous for anyone who has decided to get a 401k or gold ira rollover to protect their hard-earned wealth and retirement accounts.