Tags: Sean Hyman | plunge | stock market | investors

Sean Hyman: 50 Percent Plunge in Stock Market Is Possible

By    |   Monday, 02 March 2015 01:38 PM


The dollar has hit multi-year highs against a range of currencies in recent weeks, and the stock market continues to flirt with record highs, but Newsmax Finance insider Sean Hyman told Newsmax TV that the trend won't last.

"I don't believe the dollar continues to be the place to be," he told the network's "America's Forum" show. "Somebody would be better off in euros, Australian dollars or things like that."

As for the stock market, "it's elevated right now," notes Hyman, author of "The Six Keys to Financial Success!"

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"I don't expect it to perform as well over the next 12 months as it has over the past 12 months." The S&P 500 has returned 13.2 percent during that period.

European stocks are more attractive now, with lower valuations than in the U.S., he said. The European STOXX 600 index had a forward price-earnings ratio of 16 Friday, compared to 17.8 for the S&P 500.

Could the drop by U.S. stocks be as severe as 50 percent?

"It could happen," Hyman said. "Corrections are generally 10 percent, 20 percent or 30 percent. But we have had a couple of corrections — in 2000 and 2008 — that were on the tune of 40 percent, 50 percent."

Volatility has kicked up at times in recent months, "as the stock markets is getting high and the economy is not performing as well," Hyman said. "So there's a little bit of a decoupling of what markets have done versus what the economy has done."

GDP growth slowed to 2.2 percent in the fourth quarter from 5 percent in the third.

In addition, "we continue to stack up a lot of debts and the public sentiment is not as good as it used to be," Hyman said. "When you combine all this, you do get some extreme volatility, and we could see that later this year or early next year."

So what should we do as investors?

"I would invest in European markets, probably taper back some of your money in U.S. markets," Hyman said "Have you savings for later 2015, early 2016, and make sure you're living well below your means."

On the subject of President Obama's proposal to increase taxes on the wealthy, "that does not work," Hyman said. "One, there's not enough rich to go around. There's only so many that are in the rich class."

For the Obama administration to bring in the revenue it seeks, "they've got to bill it as taxing the rich and then come down and tax the middle class [too]," Hyman said.

But all this would mean big trouble. "That's just going to be horrible on our economy," he said.

"It's not the way to go. If anything, they need to work with businesses to repatriate capital back to the U.S. to add the jobs here. That's the way to go."

About Sean Hyman
Sean Hyman is a member of the Newsmax Financial Brain Trust.
Click Here to read more of his articles. He is also the editor of Ultimate Wealth Report. Discover more by Clicking Here Now.

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The dollar has hit multi-year highs against a range of currencies in recent weeks, and the stock market continues to flirt with record highs, but Newsmax Finance insider Sean Hyman told Newsmax TV that the trend won't last.
Sean Hyman, plunge, stock market, investors
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2015-38-02
Monday, 02 March 2015 01:38 PM
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