$Three Legs(TIAA026025)$ $Twenty Beef Selection(TIAA026064)$
All index stock bond spread: 0.24% (-2%-1.5%), fixed investment multiple 1.1 times (0.6-1.5), position 70%
The Silicon Valley Bank matter was temporarily resolved yesterday.
But everyone is worried about a bigger crisis in the future, so this article will talk about it again.
Current update:
In a joint statement with the Federal Reserve and the FDIC on Sunday, the U.S. Treasury Department said that Silicon Valley Bank depositors “will have access to all of their funds beginning Monday, March 13, and that any losses related to the resolution of Silicon Valley Bank’s problems will not be covered by Taxpayers are responsible.”
People say that regardless of whether the insured amount exceeds 250,000 US dollars, starting today, zf will take the bottom line and take whatever you want.
In addition, your Silicon Valley Bank has no money. I will give you a loan and take your national debt as collateral, so that you don’t have to sell your assets at a low price.
And worried that the Federal Reserve will not have enough funds, the Ministry of Finance also intimately launched a new loan plan with a scale of 25 billion U.S. dollars to provide firepower to the Federal Reserve.
However, investors who bought Silicon Valley Bank will not have such a good thing. After the stock plummeted by 63%, it is impossible to pay compensation, so they can only feel heartbroken.
So no, at present, the other two companies that have been run on, First Republic Bank, the stock price is still down 70% before the market, and Westpac Bank is down 50% .
Here comes the question, Lehman let it fall because of what it said before, why did the Fed just cash it out again this time.
Because Lehman is an investment bank and has no deposit-taking business, the FDIC can’t get involved, and naturally it can’t give it a full coverage.
But after 2008, AIG and Washington Mutual Bank, such companies involved in ordinary people’s deposits, are actually backed by the FDIC.
And regardless of the appearance, whether it is the essence of the bottom line depends on whether it will cause a public credit crisis.
For example, if you can’t withdraw money from Silicon Valley Bank, do you also worry that other small banks have no money?
So everyone lined up to run together, and a financial crisis would break out .
So in order to solve the countless problems that follow, we must solve the first Silicon Valley Bank problem…
For example, when Lehman collapsed in 2008, the U.S. emperor was still able to sit still.
But after Washington Mutual Bank went bankrupt, the U.S. government quickly submitted a $700 billion financial rescue plan.
Finally, let me talk about what everyone cares about most.
Is such a big thunder in the United States a precursor to the 2008 subprime mortgage crisis?
Let’s talk about what will happen to the stock market if it really happens…
Let’s review the thunderstorms of Lehman Bank, AIG and Washington Mutual Bank on September 15, 2008.
At that time, Lehman Bank and AIG were on the day of the thunderstorm on September 15, 2008, and the S&P 500 plummeted by 4.71% , closing at 1192 points.
Unfortunately, this was only the beginning of the storm. In just two months, the S&P 500 continued to fall by another 30% , all the way down to 860 points in November.
Then there was a false rebound, but it continued to fall, and finally fell by 15% , falling to 667 points . In March 2009, the stock market bottomed out.
The entire down cycle took six months.
Then, it took another year or so, that is, in April 2010, the S&P 500 quickly returned to above 1200 points, recovering the previous decline.
The whole process took almost 1 year and 6 months. In the middle, it first fell by 45%, and then rose by 80%, showing a big smile curve.
The approximate rhythm is:
The bankruptcy of bank stocks caused massive panic and the stock market fell sharply. The Federal Reserve threw out a $700 billion rescue plan. After the stock market stabilized, the negative decline gradually bottomed out and began to rebound.
………..
But at present, I think that after such a moth incident, the next interest rate meeting on March 23 may only increase by 0.25%, or even not increase at all, and the possibility of increasing 0.5% will completely disappear.
So what happens to the stock market next depends on how much this banking incident can force the Fed to make concessions.
After all, people are going to freeze to death, and you continue to turn on the air conditioner, isn’t it because you want it to hang up?
Moreover, this wave is equivalent to a round of stress tests for small banks. If the weakest of this wave can survive this wave, the probability of systemic risk occurring next will be greatly reduced.
In short, as rational investors, I don’t think it is necessary to predict whether future crises will occur.
After all, the Federal Reserve can only see its tricks, and you can predict it better than it~
And the crisis will come sooner or later, just like a person’s illness, no one can be sure when it will happen.
The key is how we deal with it when it happens.
For example, if the S&P 500 was held and bought on the day of the Lehman Brothers thunderstorm, the earnings data over the years are as follows:
Nuo, as above, the worst worst case scenario is that it will continue to fall by 30% to 40% in the next few months, just like subprime mortgages.
So even if it does appear, you must stabilize your mentality.
After all, it has fallen so much. According to historical experience, there is a high probability that the Federal Reserve’s money printing machine will come to save lives. A deep V, close your eyes and resist, it will pass…
For example, although the 6-month index in 2008 fell by nearly 40% , the return returned to normal within 3 years.
If there is a bullet to cover the position, it will not even take three years, but return in two years.
And if the cycle is longer, if you look at it for more than five years, the annualized income will reach 8.5%~10%, so the attraction will come~
Although historical data does not equal the future, it can also be seen from the above cases that it is difficult to say in the short term, but if you persist in the long term, the rate of return will not be too bad.
In fact, I think the current stage is actually a good time to make fixed investment.
Because regardless of whether there will be a sharp drop in the next crisis, and then dig a V pit, or enter the slow bull, fixed investment is a good choice.
For stock allocation, let’s try to lengthen the investment cycle and ignore short-term fluctuations…
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