Dear Reader,
I haven't written in the blog for a while. Meanwhile my prediction that there is going to be a correction came true with 9.9% fall in the S&P 500 in September/October. The market fully recovered since then.
However, I still expect that there is going to be more serious fall (20-30% in the main indices) and 30-40% in technology stocks in 1 to 2 years, once the Federal Reserve starts tightening. Basically, there is a bubble in technology stocks. The valuation of the US stock market(excluding some pockets) is too high for the economic environment the world is in.
The EUR/USD is well on its way to 1.00 in 2 to 3 years. The 10 year treasury should hit 3% or more in the same time span. The German 10 year yield should climb higher from the current lows.
For now, though, in my opinion it seems smart to be long certain value US stocks.
Disclaimer: This article is provided solely for informational purposes, and does not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost are the author's and they in no way express the opinion or official position of Bulgarian National Bank!
Conflicts of interest: I may possess some of the securities or currencies mentioned in the blogpost!
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