Fair Warning from the Stock Market!

Yet Another Market Sell-Off

There’s no telling how many warnings you’ll get.  Tuesday’s sharp sell-off can be considered a fair warning.

The stock market closed down.  The Dow Industrial were off 280 points at the close, but at one point during the session, it had dropped 450 points;  that follows a 268 point drop on Monday, a day that also registered the biggest S&P500 drop in months.

It was quite a sharp reversal for the stock markets with the S&P off to its worst start for a December since 2oo8.  And you probably remember 2008.  If not, maybe the term “Great Recession” will ring a bell.  

American manufacturing has been shrinking for four straight months.  Construction spending is down.  At the same time, hope for trades deals appears to be dashed once again.  

We think you should take this warning seriously.  This is the longest bull market in stocks without a 20 percent correction in history.

While we’re at it we probably ought to remind you of what happened last December.  It was the worst December for stocks since 1931.  And in case you don’t remember 1931, two words:  Great Depression.

As we wrote recently about the market’s action at the end of last year, the S&P500 had traded as high as 2941 points in late September; by Christmas Eve it was 2350, a staggering 20 percent loss in only three months!  

Fair warning:  the more volatile the stock market, the more dangerous to you.  And the more important it is to own gold.

We will part with advice for stock market investors from Baron Nathan Rothschild who explained that he made his fortune because he always sold “too soon.”