Most investors on Wall Street believe that the bull market is still intact, however, there are a growing number of financial experts who are starting to exit the stock market. Economist Ted Bauman believes that the bull market in US stocks is about to come to an end and he has several reasons to support his claim. Mr. Bauman has been an editor for Banyan Hill Publishing since 2013 and he has helped many of his subscribers make sound financial investments. He feels that it is important for investors to focus on low-risk investment strategies and techniques to preserve their wealth.
Ted Bauman feels that higher interest rates could end the bull market in stocks. Higher rates are eventually going to weigh down the US economy. The Federal Reserve plans to continue raising interest rates and many financial analysts believe that three percent will be enough to drive stock prices down and take its toll on the US economy. Ted Bauman also feels that the trade war between China and the US could have implications on the world economy and could also place US equities in a bear market. If the trade war continues, Mr. Bauman believes that the Chinese government will retaliate against US companies that rely on revenue from doing business in China.
Ted Bauman is pessimistic about the US stock market as a whole; however, he still sees opportunities in stocks and does not think investors should dump all their equity holdings. He feels that the trade war has created an opportunity for investors to buy shares in some of the largest companies in China at cheap prices. One investment vehicle an investor can choose to gain exposure to some of the largest publicly traded Chinese companies is the iShares China Large-Cap ETF. The price-to-earnings ratio for the companies in the ETF represents a bargain not seen in these shares since the end of the financial crisis of 2008. Mr. Bauman also feels that it is prudent for investors to have bonds in financial portfolios. Many investors neglect bonds altogether and focus on stocks only. This is a huge mistake, as a balanced portfolio should contain both stocks and bonds. Bonds pay interest and can help an investor survive a bear market in equities.
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