Are Stocks Headed for a 2008 Style Catastrophe?

Stock Crash

With a global sell-off in equity markets around the world sparking fears that we may be headed for another 2008 style financial collapse, analysts around the world have been weighing in with their opinions about whether or not we are close to the bottom in equities markets.

With Jim Paulsen, Chief Investment Strategist at Well Capital, claiming yesterday that stocks are near the bottom, and Jim Cramer, popular CNBC analyst claiming exactly the opposite, it can be difficult to know what stocks are going to do next and just how far from the bottom we are.

One thing is certain – stocks prices around the world are being hammered in a way we haven’t seen for years. The DJIA is down over 12% YoY, the DAX is down 18.4%, and China’s main index, the SHCOMP, is down 12.5%.

Are global stocks approaching their bottom, or is this just the beginning of a much bigger storm brewing?

Legendary investor Warren Buffet once said, “Be fearful when others are greedy, and greedy when others are fearful”. There may be bargains out there for those with a long-term outlook for now, but there may be a long way down before they see a reasonable return on investment.

With so many contradictory views, opinions and analysis, it’s impossible to say definitively whether we are near the bottom.

All we can do is place our trades and hope for the best. What’s your opinion?


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