Will the DOW Crash in 2021? And Why Am I Saying I Think We Are Due for a Heavy Stock Market Correction in the New Year?
Will the DOW crash in 2021? That is the topic that we are exploring in today’s new blog post, which talks about the finances and the realities of why we are likely due for a correction of the DOW jones industrial average in 2021. I don’t think that we are going to have a near 50% correction, or even a historic flash crash like we did in 2020 is necessarily going to happen in 2021, however I also think that the way the US economy is currently trending, and how world politics and the current Global climate and pandemic and how it rages on heavily is going, that the stock market is definitely way over valued right now and is way overdue for a correction. I think the likelihood of the DOW continuing on its current trend and shooting up to like 35,000 this year is fairly low, and that companies like Apple, TESLA, Google, Amazon and Facebook, which make up more than 20% of the index, are due for a correction which will correct the market. Expect a 10-15% correction this year, with EOY numbers sitting at somewhere likely between 25,000 to 27,000, I think we’ll crack 30,000 again in 2022 once the economic recovery starts and the unemployment numbers don’t look so grim. More on this later in the post, read on or subscribe to our blog for additional details and information.
Other topics we’ll be covering in the subject of finance on this blog include the following:
Income Tax
Market Corrections
Why you cannot time the market
Which IPOs to buy
How to trade technicals
How to trade fundamentals
hot new start-ups you can buy on the private market
Updates to the TCJA (Tax Cuts and Jobs Act)
What a Captive Insurance Company Is
The Realities of the IRS Dirty Dozen List for Tax Year 2021
How to file a form 1040
And the like, read on or subscribe to our blog for additional details and information.
Will the DOW Crash in 2021? And Why I Say We Are Due for a Correction
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So, the DOW is at just over 31,000 right now, and this is largely popped up by a small market bubble of a handful of high soaring tech stocks, mainly Tesla, Nvidia, Apple, Amazon, Facebook, Google, and a handful of others, as well as a handful of new IPOs, like the upcoming Doordash IPO, and the popular Snowflake IPO that was propped up by Berkshire Hathaway investors putting a $1 Billion bet on the company and clearing $800,000,000.00 on just a $250,000,000.00 buy in a single day. I really can’t see the DOW continuing this amazing yet somewhat ridiculous market rally that it has had towards the second half of this year, and truly believe that if it doesn’t see a correction, that the market may just stagnate and stay where we’re at now.
Why The DOW Could Still Hit 35,000 This Year
With this being said, we are currently on something of a bull market rally right now, and with vaccines being pumped out at record pace right now, and even higher numbers of people taking the vaccine in the United States and now globally, I think that global stocks and US stocks could absolutely have something of a soaring point at around the middle of the year once virus numbers start to plummet. I think some of this will be corrected and fall back to the 25,000 to 30,000 range near the close of the year however, as the cold reality that the fundamentals do not support these valuations will eventually set in. Or I’m completely wrong and it is going to skyrocket past 40,000 at close of the year….but somehow that doesn’t seem so realistic.
Final Thoughts on Will the DOW Crash in 2021, And Why I Say We’ll be Down to 25,000 by New Years
What do you think about the DOW jones industrial average and where its valued at right now, and do you agree with my assessment that stocks are propped up by nothing but a tech market bubble and a hoard of castle in the air investors? Why or why not, comment down below and let us know and remember to subscribe for daily finance articles.
Cheers!
*Inflation Hedging.com
Sources:
https://www.bankrate.com/banking/cds/cd-rates/
https://money.cnn.com/data/markets/
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My thoughts on the stock market valuation…it will not suffer anything but minor/temp corrections until bond/CD rates improve enough for retirement crowd to live on.
The market has untold billions of dollars that belong in Treasury notes, CD’s and other bond products….they are there because you would end up starving to death on the current non stock returns.
When the rates go back to even around 4-5% the market will then fully correct. It will be a slow correction…likely to take 2-3 yrs. Until then…the stock market is the only game that is viable….besides working for a paycheck. Ha.