Full adoption is around the corner, and it’s conceivable that cash in our society will become obsolete in our lifetime. Protecting your portfolio from a market on a 10-year run will take creative thinking on the part of investors who have been trained to take the easy road by investing in mutual funds, ETFs and listening to brokers who sell product with the highest commissions.  The best idea for investors who have profits in stocks is to start looking at digital currency and work to understand the current flight to quality trends in the markets today.

Some recent peer-reviewed research shows that flash crashes are not isolated occurrences, but have occurred quite often. Gao and Mizrach studied US equities over the period of 1993–2011. They show that breakdowns in market quality (such as flash crashes) have occurred in every year they examined and that, apart from the financial crisis, such problems have declined since the introduction of Reg NMS. They also show that 2010, while infamous for the Flash Crash, was not a year with an inordinate number of breakdowns in market quality.[11]
In 2005, subprime loans were rampant and as a result, the country over-leveraged itself. Subprime loans, the riskiest loan type given to borrowers with low credit scores, totaled more than $620 billion. Fast forward ten years and subprime originations make up only 5 percent of the mortgage market and add up to $56 billion. Compare that to 2005 when subprime origination made up 20 percent of the market. This represents a 91 percent decline from the height of bad loans that set up the economic crash.
Many of these Toronto neighbourhoods are in such strategic locations for employment, that given the housing shortage, urban intensification, poor transit and roadways, that the condos and homes in them will never see a significant price drop. The events of the last 3 months with the Liberal’s fair housing act was an acid test. These Toronto neighbourhoods look to be the best neighbourhoods for safe real estate investment.
The past week saw “risk on” with the latest escalation in the US/China trade conflict being less than feared. This saw shares rally, bond yields rise, commodity prices gain, the US$ fall and the A$ rise. US shares rose 0.9%, Eurozone shares gained 2.1%, Japanese shares rose 3.4%, Chinese shares rose 5.2% and Australian shares rose 0.5%. While the Australian share market participated in the global share market rebound, over the last week it has gone back to underperforming again, reflecting its relatively defensive/high-yield characteristics.
In this example, a tail-hedged portfolio would spend 0.5% of its equity exposure every month buying 2-month put options that are about 30% out-of-the-money. After one month, those put options are sold and new ones bought according to the same methodology. Spitznagel demonstrates the value of this methodology in the chart below. When Tobin’s Q is in its uppermost quartile, the portfolio he describes above outperforms a simple buy-and-hold approach by about 4% per year.

A truly stunning result of these investigations is that the real-life frequency and size of market returns bear a notable resemblance to what is obtained by running very simple computer models. This also goes for earthquakes, solar flares, forest fires, and river floods: most of the simulations yield similar results to real life where events are frequent but small, but occasionally some gigantic one appears from nowhere.
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The sandpile study was introduced in a 1987 paper by Per Bak, Chao Tang and Kurt Wiesenfeld, three scientists working at the Physics Department at the Brookhaven National Laboratory. Ironically, the paper was presented to Physical Review Letters a few months before the stock market crash of October 1987, still today the largest ever one-day drop. The title was "Self-Organized Criticality" and falls within a branch of mathematics known as Complexity Theory, which studies how systems can organize themselves into unexpected behaviors arising from the interaction of its smallest and seemingly independent components.
The rising dollar has already caused "an emerging market slowdown aggravated by U.S. tariffs, which already contributed to a bear market in China and Turkish lira crash. Dollar upside risk remains as the U.S. Federal Reserve intends to hike despite risks abroad, including a contentious Brazilian Presidential election, Italian budget, Brexit planning," he added.
Hi Kesh. You’re welcome. I can’t advise you however if you check the Toronto condo market during February, you’re giving the market time to bottom out. Anything under $500k will in extreme demand because of the stress test rules. $900 a square foot is scary, especially for a 1 bedroom. However, immigration is rising fast, there’s not much inventory, and there is a lot of reason to consider the possibility of a housing boom rather than a housing crash. The government doesn’t want to sincerely increase supply, so they’re going to try to kill demand. That’s where they run the risk of killing an economy that’s still dependent on real estate. But Millennials need somewhere to live as do all these new immigrants. The question you should consider before buying is will Trudeau and Wynne get routed out of office before they create a recession? Are you investing or do you need to live in the unit?
I am very frightened. This past June, I allowed a financial advisor to convince me that my portfolio made up of primarily stocks was risky for a retiree. I have been retired since 2005 and had held the same stocks since then. These stocks included 2 Canadian banks, BCE, TransAlta, and Emera. I was receiving dividends o $4,800 per year and all the stocks consistently raised their dividends. The financial advisor put me in2 costly mutual funds which proceeded to lose me $ 1800 within days and also swallowed up up my incoming dividends from the former portfolio. By the time I was down $6,000 I panicked and pulled out of the mutual funds. And! This was in 2017. What I have left and what I thought would carry me through my retirement is now in a money market making very little and I am terrified daily as to reinvesting it.
The Wall Street Crash had a major impact on the U.S. and world economy, and it has been the source of intense academic debate—historical, economic, and political—from its aftermath until the present day. Some people believed that abuses by utility holding companies contributed to the Wall Street Crash of 1929 and the Depression that followed.[33] Many people blamed the crash on commercial banks that were too eager to put deposits at risk on the stock market.[34]
The transition to a US centered economy puts the country into a vulnerable period of uncertainty and GDP risk. Companies are hoarding products from China right now while the tariff is 10%, but on January 1st 2019, it will be 25% and that should stop imports completely, especially if the US dollar should weaken. Will companies build factories here or instead hold off and hope for a Trump loss in 2020?
Finally, once the perfect storm outlined above occurs, the policy tools for addressing it will be sorely lacking. The space for fiscal stimulus is already limited by massive public debt. The possibility for more unconventional monetary policies will be limited by bloated balance sheets and the lack of headroom to cut policy rates. And financial-sector bailouts will be intolerable in countries with resurgent populist movements and near-insolvent governments.
In 2011 trades by high-frequency traders accounted for 28% of the total volume in the futures markets, which included currencies and commodities, an increase from 22% in 2009. However, the growth of computerized and high-frequency trading in commodities and currencies coincided with a series of "flash crashes" in those markets. The role of human market makers, who match buyers and sellers and provide liquidity to the market, was more and more played by computer programs. If those program traders pulled back from the market, then big "buy" or "sell" orders could have led to sudden, big swings. It would have increased the probability of surprise distortions, as in the equity markets, according to a professional investor.[citation needed] In February 2011, the sugar market took a dive of 6% in just one second. On March 1, 2011, cocoa futures prices dropped 13% in less than a minute on the Intercontinental Exchange. Cocoa plunged $450 to a low of $3,217 a metric ton before rebounding quickly. The U.S. dollar tumbled against the yen on March 16, 2011, falling 5% in minutes, one of its biggest moves ever. According to a former cocoa trader: ' "The electronic platform is too fast; it doesn't slow things down" like humans would. '[81]
No expert prediction or technical indicator is necessary. The makings of the next crash are already clear. Whether it’s Janet Yellen or Jerome Powell who will head the Federal Reserve after February 2018, interest rates can only move higher. At the current rate of debt, even 100 basis points (one percent) higher interest will mean $200.0 billion in additional (not all, mind you, just the extra bit) in debt.
The internal reasons included innovations with index futures and portfolio insurance. I've seen accounts that maybe roughly half the trading on that day was a small number of institutions with portfolio insurance. Big guys were dumping their stock. Also, the futures market in Chicago was even lower than the stock market, and people tried to arbitrage that. The proper strategy was to buy futures in Chicago and sell in the New York cash market. It made it hard – the portfolio insurance people were also trying to sell their stock at the same time.[14]
When markets are very volatile, the overall trend tends to be down.  So what investors should be hoping for are extremely boring days on Wall Street when not much happens.  That has been the usual state of affairs for much of the past decade, but now volatility has returned with a vengeance.  The following is how CNBC summarized the carnage that we witnessed on Friday…
Meanwhile, domestic stock markets were closed on Thursday on account of Muharram. On Wednesday, the indices ended on a lower note. The S&P BSE Sensex settled at 37,121.22, down 169.45 points and the Nifty50 index of the National Stock Exchange (NSE) ended at 11,234.35, with a loss of 44.55 points. This was the lowest closing levels for markets since late July. (With agencies inputs)
Moreover, the leverage in many emerging markets and some advanced economies is clearly excessive. Commercial and residential real estate is far too expensive in many parts of the world. The emerging-market correction in equities, commodities, and fixed-income holdings will continue as global storm clouds gather. And as forward-looking investors start anticipating a growth slowdown in 2020, markets will reprice risky assets by 2019.
Currently, the U.S. stock market is in the midst of one of the longest bull markets in its history. Since bottoming out in March 2009, the broad-based S&P 500 (INDEX: ^GSPC), led by a strong rally in technology stocks and other growth industries, has surged by more than 325%! Mind you, the stock market has historically returned 7% a year, inclusive of dividend reinvestment and adjusted for inflation. So, to say that things are going well right now would be an understatement.
The joint report continued: "At 2:45:28 p.m., trading on the E-Mini was paused for five seconds when the Chicago Mercantile Exchange ('CME') Stop Logic Functionality was triggered in order to prevent a cascade of further price declines. In that short period of time, sell-side pressure in the E-Mini was partly alleviated and buy-side interest increased. When trading resumed at 2:45:33 p.m., prices stabilized and shortly thereafter, the E-Mini began to recover, followed by the SPY".[41] After a short while, as market participants had "time to react and verify the integrity of their data and systems, buy-side and sell-side interest returned and an orderly price discovery process began to function", and by 3:00 p.m., most stocks "had reverted back to trading at prices reflecting true consensus values".[41]

It's true that higher interest rates preceded the housing collapse in 2006. But that's because of the many borrowers who had interest-only loans and adjustable-rate mortgages. Unlike a conventional loan, the interest rates rise along with the fed funds rate. Many also had introductory teaser rates that reset after three years. When the Federal Reserve raised rates at the same time they reset, borrowers found they could no longer afford the payments. Home prices fell at the same time, so these mortgage-holders couldn't make the payments or sell the house.
The transition to a US centered economy puts the country into a vulnerable period of uncertainty and GDP risk. Companies are hoarding products from China right now while the tariff is 10%, but on January 1st 2019, it will be 25% and that should stop imports completely, especially if the US dollar should weaken. Will companies build factories here or instead hold off and hope for a Trump loss in 2020?
A second, highly visible result of the crash was the advancement of measures to control third-party development of software. Using secrecy to combat industrial espionage had failed to stop rival companies from reverse engineering the Mattel and Atari systems and hiring away their trained game programmers. While Mattel and Coleco implemented lockout measures to control third-party development (the ColecoVision BIOS checked for a copyright string on power-up), the Atari 2600 was completely unprotected and once information on its hardware became available, little prevented anyone from making games for the system. Nintendo thus instituted a strict licensing policy for the NES that included equipping the cartridge and console with lockout chips, which were region-specific, and had to match in order for a game to work. In addition to preventing the use of unlicensed games, it also was designed to combat software piracy, rarely a problem in the United States or Western Europe, but rampant in East Asia.[citation needed]

Hi Mike, I would say yes, see the https://gordcollins.com/real-estate/mississauga-real-estate-forecast/ post on those trends. Milton has no room to grow with everyone wanting to live there. They’ll get the free trade deal resolved and Doug Fords new plan to expand northward into farm country will stimulate the economy like crazy. Detached in Mississauga/Milton are rare finds so not surprising Milton has the 3rd lowest days on market in the GTA. Once Ford is in, the prices will rise because he probably will turn the economy on.
Also, be sure you're focused on percentages, not points, when thinking about stock market movements. This is something the media doesn't sufficiently understand, often reporting market drops in points instead of percentages. As an example, the Dow Jones Industrial Average dropped by a whopping 1,175 points in a single day in February 2018, which sure sounds like a lot -- especially compared with 1987's "Black Monday," when the Dow fell 508 points. But in percentage points, it was a meaningful yet not catastrophic 4.6% decline -- while 1987's drop wiped out 22.6% of the market's value at the time. The Dow was near 26,000 at the time of this writing, and the S&P 500 was around 2,800. At those levels, if the Dow "plunges" by 260 points, remember that it would be just a 1% move. Even a 1,000-point drop would be just a 3.85% decline.
The U.S. game industry lobbied in Washington, D.C. for a smaller $1 coin, closer to the size of a quarter, arguing that inflation (which had reduced the quarter's spending power by a third in the early 1980s) was making it difficult to prosper.[21] During the 1970s, the dollar coin in use was the Eisenhower dollar, a large coin impractical for vending machines. The Susan B. Anthony dollar was introduced in 1979, and its size fit the video game manufacturers' demands, but it was a failure with the general public. Ironically, the new coin's similarity to the quarter was one of the most common complaints. In Canada, existing dollar bills were removed from circulation and replaced with coins in 1987.
This was an attempt to hedge a 20% decline in $100,000 of equities so it performed pretty well in our hypothetical crash, protecting against nearly the entire loss. And you could also work backwards, as Spitznagel suggests in the second strategy described above, using this calculator. This way, you might say I want to protect against a $20,000 loss so I need to buy 61 put options ($20,000 divided by $328.10) rather than just the 55 we bought using the first strategy.
That's a short term shock which makes a lot of people catch their breath. When a country as big as China has a short term shock (even in stocks), a lot of people in other countries get nervous. It's not just stocks, either; the price of oil has dropped dramatically in recent months—good for a lot of people who consume oil (airlines, transportation, individuals), but bad for people who produce oil (oil-rich countries, petrochemical refineries).
After a very brief rally earlier in the week, stocks have been getting hammered again.  The S&P 500 has now fallen for 9 out of the last 11 trading sessions, and homebuilder stocks have now fallen for 19 of the last 22 trading sessions.  It was a “sea of red” on Thursday, and some of the stocks that are widely considered to be “economic bellwethers” were among those that got hit the hardest…

The internet is a wonderful place, and best of all, this knowledge can be found for FREE! The more you know about crisis situations, the more ready you will be to face them. Some sites are friendlier to beginners than others, so if you stumble upon a forum where people seem less than enthusiastic about helping people who are just starting out, don’t let it get you down. Move on and find a site that makes you feel comfortable. Following are some of my favorites, and the link will take you to a good starting point on these sites. In no particular order:
If you really believe the market is headed for an imminent crash, there are all sorts of places you could invest your money. You could move it all into cash, you could buy gold or real estate or for that matter you could even take an aggressive approach and try to capitalize on stocks' carnage by loading up on investments designed to rise when the market falls, such as bear market funds or put options.
Any of the measurements people quote—any of the stock market indexes which go up and down—are just measurements. They're averages. They're big bundles of numbers all mixed together. In all truth, they only reflect a snapshot of a point in time. They're numbers that stocks happened to end on when trading stopped for the day (or, at least, paused until after hours trading took over).
On August 24, 1921, the Dow Jones Industrial Average stood at a value of 63.9. By September 3, 1929, it had risen more than sixfold, touching 381.2. It would not regain this level for another 25 years. By the summer of 1929, it was clear that the economy was contracting, and the stock market went through a series of unsettling price declines. These declines fed investor anxiety, and events came to a head on October 24, 28, and 29 (known respectively as Black Thursday, Black Monday, and Black Tuesday).
These countries are full of boastful bravado about their ability to stand on their own two feet without the US, the reality is the abruptness of the protectism wave might be too much. If these economies collapse, including a China housing market collapse would a Tsunamai be sent toward US shores that would send into recession.  Right now, this could be the number one threat.
When asked if today’s stock market carnage could be a contagion effect of IL&FS default, Deven Choksey, Managing Director of KRChoksey Shares & Securities Private Ltd told CNBC TV18,”It is an asset-liability mismatch. The fear you have a money recovery taking place; the government of India is required to pay off the money pertaining to the projects, and particularly i think the road projects, where I think a question of Rs 10,000 crore of collection is required to be taken care of. According to me it’s a temporary mismatch, and I don’t think they are undercover on debt. We have sufficient amount of cover as far as the assets are concerned; may be they have defaulted on their payments, and as a result the ratings agencies have downgraded them, and that has led to this kind of a cascading effect. But to me, as I understand, this money should come back to IL&FS and that should ultimately help them in resolving the asset liability mismatch situation or a liquidity situation in which they are right now.”
Professor:        I certainly believe so, but this will happen with extreme volatility. I am more worried about the retail investor the so called silent majority. With this wild fluctuation, his survival rate in the market is next to zero. He will not easily believe that the market will bounce back in the near term. You cannot blame him. His ability to withstand paper loss (temporary) is very small. So he will easily buckle and sell out. All I can say is that we are slowing moving into a panic mode. We still have to wait a while to see the green shoots. Are we ready to wait?

Jones is widely credited with predicting, and profiting, from the stock-market crash on Oct. 19, 1987, which saw the Dow lose nearly 23% of its value, marking the largest one-day percentage decline for the blue-chip benchmark in its history. Jones founded Tudor in 1980 and became known for trading everything from currencies to commodities. His record has featured middling returns and an exodus of billions from his hedge fund in more recent years. According to a Forbes list of billionaires, Jones boasts a net worth of $4.7 billion
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