The 2021 Stock Market Crash Coming? - How To Prepare

TL;DR

The stock market is currently experiencing a period of euphoria, with investors focused on potential gains and overlooking the possibility of a crash in 2021.

Transcript

well folks welcome into today's video we gotta have a little chat okay a little chat we must see here we are we're coming up on the end of 2020 and this is usually the time of year in the last few weeks when people start thinking about the next year the upcoming year and people start thinking what's going to happen next year will it be a stock mark... Read More

Key Insights

• ✋ Valuations in the stock market are extremely high, which could be a cause for concern.
• 🤨 The Nasdaq has experienced a significant increase over the past year, raising the possibility of a crash in 2021.
• 💗 The growing number of retail investors, fueled by platforms like Robinhood, has contributed to a market that may be disconnected from reality.
• 🧑‍💻 The potential breakup of large tech companies, such as Facebook, could create more uncertainties and overhangs in the market.
• 🖤 The current optimistic sentiment and lack of discussion about a crash are reminiscent of past market bubbles.
• ❓ The market has been heavily influenced by the influx of cash due to limited spending opportunities in other areas.

Questions & Answers

Q: Why is there limited talk about a potential stock market crash in 2021?

The optimism surrounding vaccines and recent IPO successes, such as Airbnb, has caused investors to focus on potential gains rather than the possibility of a crash.

Q: What are some potential factors that could contribute to a crash in 2021?

The need for ETFs and funds to rebalance their portfolios, extremely high valuations, and the possibility of rising interest rates and capital gains tax rates are factors that could contribute to a potential crash.

Q: Why could Tesla be a dead money stock in 2021?

While Tesla is expected to report impressive numbers, its stock price may not reflect these positive results due to already being priced in. This could lead to stagnant or downward trends for the stock.

Q: What impact could tax policies under Joe Biden's administration have on the stock market?

Corporate taxes potentially increasing from 21% to 28% and the possibility of higher capital gains tax rates could lead to decreased investment and selling in the stock market.

Summary & Key Takeaways

• There is limited chatter about a potential stock market crash in 2021, possibly due to optimism surrounding upcoming vaccines and recent IPO successes.

• Valuations in the market are extremely high, with the S&P 500 and Russell 2000 exhibiting sky-high forward P/E ratios.

• The Nasdaq has seen a tremendous increase over the past year, which could be a warning sign for a potential crash in 2021.