Brexit, the fragility of Italy… the reasons to worry about a collapse in the market seem to be many. Station to errors.

“Are you ready for the financial crisis of 2019 ?” The question asked by the New York Times last December 10 leaves little room for doubt. The fall in stock markets since the summer has served as a wake-up call. At the lowest the eve of Christmas, the CAC 40 index of the Paris stock Exchange plunged 18 % compared to its peak in the month of may, while on Wall Street, with a 9 % decrease on the last month of the year, the S&P 500 index of american values lived out his worst month of December since 1931. Must we for as many feared a crash like in 2008 ?

It has been known for many other air holes can be dizzying. From February to August 2011, during the euro crisis, the CAC 40 lost 31 %. From April 2015 to February 2016, it has still plunged 26 %, with the drop in oil prices.

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Brexit, credit bubble us, interest rate hike from the federal Reserve, economic slowdown in China, the fragility of Italy, to name a few, the reasons to worry are many. The professionals held to account in their forecasts to 2019. For the company management CPR AM, in the worst – case scenario, global growth is unsatisfactory, a hard Brexit… -, the stock markets could lose 7 to 10 % on average over the entire year 2019, summarizes Laetitia Baldeschi, director of studies and strategy.

beware of scams

If the forecasts for the nuances of this type can help to identify the risks, predictions catastrophic, which run amok on the Internet, far from rendering services to investors, are the honey of counsellors doubtful, even the crooks in bitcoin and other investments can. Typing in “is my money safe at the bank ?” in a search engine, it falls thus from the outset on a financial site, answering in the negative. After a speech of “pseudo-scientist” on the collapse of the banks, it reads : “The risk is simple, everything to lose”, follow-up advice : “Flee the shares, the euro funds, the debt, the REITS, the liquidity bank, the plans, housing savings (PEL), savings accounts logement (CEL) and other”… The goal ? Direct clients to investments like gold, real estate to “high performance”, the currency on the foreign accounts allegedly safer… which history has shown that they are protected by nothing from the disasters, especially when they could not.

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Problem : to flee the Stock market when panic is spreading is often the best way to lose his money. We can guard against falls, but on the condition to sell before, and not after. You can also “play down”, with technical products such as mutual funds bear (“bear”, in English). The principle is relatively simple. Their performance is the reverse of that of the CAC 40. They make money when the Stock market declines. They have taken near 20 % on average by 2018, according to the database Quantalys. Conversely, they lose when it takes color… And displayed less 11 % in January 2019.

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Between its low on the eve of Christmas (4 622 points on the 24th of December) and its comeback on February 1st (5-023 points), the CAC 40 has already returned nearly 9 %, the score of an year increase in ordinary in six weeks !

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in other words, those who sold at the height of the panic have lost 9% more than if they had waited on the 1st of February. And those who bought when the predictions of collapse seemed to be confirmed by the markets have made a good deal, as every time the Stock market is crashing. It is better to buy at the sound of the cannon and sell to the sound of the bugle than the reverse, as recommended by a famous proverb stock. But this is easier said than done.