2018 Stock Market Recap | Phil Town

TL;DR

Stock market prices remained relatively unchanged in 2018, but valuations are currently at historically high levels. Analyst predicts a significant market correction or crash in 2019.

Transcript

are you guys I'm Phil town from rule 1 investing today I want to recap for you what happened in the stock market in 2018 and give you a few thin predictions for 2019 as a reminder make sure you click the subscribe button in the Bell icon to get notifications when I release new videos so with 2018 coming to a close in 2019 coming right around the co... Read More

Key Insights

• ❓ The stock market experienced minimal growth in 2018, despite market volatility.
• ✋ Valuations in the market are currently very high, pegged at almost double the historical average.
• 🥳 Historical patterns and indicators like the Shiller P/E ratio and Wilshire GDP ratio suggest a potential market correction or crash in 2019.
• 🤗 Investors are advised to prepare for buying opportunities by having cash on hand and staying vigilant for market signals.

Questions & Answers

Q: What is the current state of the stock market as of January 2019?

The stock market remained relatively unchanged throughout 2018, with the DJIA showing minimal growth. Valuations are currently at historically high levels.

Q: What is the significance of the Shiller P/E ratio?

The Shiller P/E ratio reflects the average price of stocks in the market divided by their earnings. The current ratio is almost double the historical average, indicating high valuations.

Q: What historical patterns suggest a market correction or crash in 2019?

The analyst points to historical instances where the market peaked and then crashed, such as in 1929 and 2000. The current high valuations and market volatility also raise concerns.

Q: How should investors prepare for a market correction in 2019?

The analyst suggests creating a shopping list of desirable businesses and having cash ready to take advantage of buying opportunities when prices drop. It is also recommended to consider exiting index funds and mutual funds.

Summary & Key Takeaways

• The Dow Jones Industrial Average (DJIA) saw little change throughout 2018, despite some ups and downs in the market.

• Valuations in the market are at very high levels, with the Shiller P/E ratio almost double the historical average.

• The analyst predicts a significant market correction or crash in 2019, citing historical patterns and indicators like the Wilshire GDP ratio.