A Global Stock Market Crash Alert !!!

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. “A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist. A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September from the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world bourses would amount to one of the worst bear markets over the last century.

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If Bob janjuah and his team have got it right, Indian markets might correct by another 35% – 40% from its current levels. So are we seeing sensex back at 8000 levels? But as I write this, our great economists have predicted 10 out of the 3 major slowdowns in the global economy.

What if they are correct, How to be least affected by the might be crash. Well let me share what I have done to tackle this situation. Just remember one important thing; Cash is the key safe haven. To be least affected by this crash is all about not loosing your money and not losing your job. Do I need to be blunter? If you have to be in credit, focus on quality, short durations, and non-cyclical defensive names. Otherwise just remain in cash. No more investments in any financial instrument for the time being.

In the current market situation the best thing to do will be to watch it with hands folded. As one of my HNI customer told me, I will prefer to pay 5% more from the current level if things change for the better, but I won’t buy now as tomorrow the same stock will be available at 10% lower price.

Well said Sir!!