A Bigger 2020 Stock Market Crash is Coming [3 Ways to Protect Your Money]

TL;DR

A stock market crash signal through the VIX volatility curve indicates potential challenges to higher returns, unrelated to COVID-19. Strategies to protect investments include options trading, investing in safety sectors, and buying gold.

Transcript

hey bowtie nation joseph hogue here with the let's talk money channel thank you for tuning in spending a part of your day to be here and and i've actually got something of an emergency video for you today i've just found a stock signal that's pointing to a stock market crash later on this year and some major challenges to any higher returns so for ... Read More

Key Insights

• 🥺 The VIX volatility curve suggests potential market risk in the next few months, possibly leading to a stock market crash.
• 💇 Repealing corporate tax cuts and the increasing budget deficit are market concerns.
• 🏅 Protecting investments can involve options trading, investing in safe sectors, and buying gold.
• 💦 Goldman Sachs estimates a potential drop in earnings per share, making the stock market expensive.
• 😳 The upcoming election and flu season add to the market uncertainty.
• 👻 Options trading allows investors to profit from market volatility while protecting their portfolios.
• 🚙 Consumer staples, healthcare, and utilities are considered safer sectors for investment.

Questions & Answers

Q: What is the VIX volatility curve, and how does it indicate market risk?

The VIX volatility curve shows investors' perception of future market risk. A steeper curve suggests higher short-term risk, whereas a flatter curve indicates lower risk.

Q: What are some potential challenges to higher returns in the stock market?

One challenge is the possibility of repealing the corporate tax cuts, which could affect corporate earnings. Additionally, a high budget deficit may lead to future tax increases for corporations or individuals.

Q: How can options trading protect investments during a stock market crash?

Selling covered call options allows investors to collect premiums and potentially keep their shares if the stock price falls. This strategy is useful in falling or sideways markets.

Q: Which sectors of the economy are considered safe for investment protection?

Consumer staples, healthcare, and utilities are considered safer sectors, as they have outperformed the market. However, technology and communication services might not provide the same level of protection.

Summary & Key Takeaways

• The VIX volatility curve indicates high market risk over the next few months, potentially leading to a stock market crash.

• The market is concerned about the repeal of corporate tax cuts, which could impact earnings and lead to tax increases in the future.

• Goldman Sachs estimates a potential drop in 2021 earnings per share, resulting in an expensive stock market and potential investor sell-off.