Why Stock Market Crash is Coming: The Home Business Defense
Many people are wondering why stock market crash will really happen.
How bad will it be?
Doesn’t the stock market always go up?
“The problem with most folks is not that they don’t know;
it’s that they know so much that just ain’t so”.
- Josh Billings (US Humorist, 1818-1885)
Most folks knew or know things like:
- Supersonic travel is impossible
- The Titanic was unsinkable
- Manned Space Flight is not possible
- The stock market will always go up
And they’re all wrong. It “just ain’t so”!
Here is why stock market crash will happen. The ratio of stock buyers to sellers has been increasing ever since the inception of the stock market. In the 1990’s, the baby boomer generation (currently age 39-58) poured trillions of dollars into retirement plans.
The market has been continuously driven higher by waves of people investing more and more money. And every year, younger buyers have entered the market. Soon, the ratio of buyers to sellers will fall – and keep falling. This ratio change will be the catalyst for why stock market crash will happen.
The value of most stocks and mutual funds right now is built on hope. Hope that more and more younger people will come along each year to buy those investments. Hardly any stocks pay dividends or give money back to shareholders anymore. How much do yours pay back?
In the year 2016, over 2.2 million people will turn 70 years old in America. In 2017, that number jumps to over 2.9 million. A jump of nearly 30% in just one year with 700,000 more people than the year before. The rate only increases from there. (Source: Prophecy by Robert Kiyosaki)
How does the price of a stock go up when more people are selling than buying? It doesn't. What happens when millions of baby boomers are required to begin withdrawing money from the stock market?
In the 1970’s, 75 million baby boomers entered the job market with money to burn. 75 million people buying anything will cause a boom. The reverse is also true. 75 million people (83 million if you count immigrants) selling anything is why stock market crash will happen. It is the basic law of economics, the law of supply and demand.
“The fact that people will be full of greed, fear, or folly is predictable. The sequence is not predictable.”
- Warren Buffet
According to Business Week magazine, in 1990 there was $712 billion in 401(k) and similar plans. Only 45% of that money was in stocks. By the end of 2000 that amount had swelled to $2.5 trillion, with 72% in stocks or similar equities. As the boom progressed, many people began taking money out of their savings and putting it into the market, primarily into stock mutual funds, swelling that asset class to $4 trillion.
There was a huge explosion in mutual fund investment during the 1990’s. Since a mutual fund is a diversified fund, many stocks are purchased instead of just one good stock. That gives the less valuable companies a higher than realistic valuation. Mutual funds have been inflating the stock prices of average companies for years, which causes a bubble…a bubble that will eventually burst.
The baby boomers will start retiring around 2011. According to the US Census Bureau, 82 million baby boomers will reach retirement age from 2011-2030. 82 million people cashing in their stocks, mutual funds, and 401(k)’s. And there will be millions fewer there to buy them. Why?
Because they are all in debt.
America’s cultural trend toward “Instant Gratification” and “Keeping up with the Jones’” has led to an out-of-control consumer debt, which will be a key reason why stock market crash will happen. The data from our irresponsible “Eat Now - Pay Later” philosophy are simply shocking:
- The typical U.S. household carries an average credit card balance of $9,300!! That’s credit card debt, not including other "good" consumer debts like mortgages, car loans, student loans, etc. (Money Magazine, Sep 2005)
- Total household debt for those 65 years and older is up 164% to $20,302 (www.debtsmart.com). Is it possible that Social Security is not covering their expenses in retirement?
- As of 2001, the total public debt in the United States was more than $6.5 trillion. That’s more than the US government’s cumulative national debt of $5.7 trillion (Robert Manning, author of Credit Card Nation, testimony to the US Senate’s Judiciary Committee).
- 23% of college students owe more than $3,000 on their credit cards. 35% of students consider themselves to be in debt, before they even begin building a life (Money Magazine, Sep 2005).
The good news: there’s an easy way to build yourself a shelter against the coming storm and not worry why stock market crash will occur. Warning people about why stock market crash will happen is like warning them about a road up ahead that is washed out. They can take another route and still arrive at their destination safe, sound, and on time.
As an F-16 fighter pilot in the US Air Force I was stationed in South Korea for a year. During the typhoon season, we would button up our jets in the hangars when a storm was on the way. When it finally hit, we would hunker down in our dorm rooms and have a “typhoon party.”
The coming financial storm will scare most people. A home business that generates a monthly residual income can offer you shelter from those winds. Instead of worrying why stock market crash will happen and watching your hard work melt away - you could be having a typhoon party instead.
Request our FREE Home Business Success Pack to see how.
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Don't Worry About Why Stock Market Crash Will Happen
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