A Stock Market Crash in April Is Very Possible

stock market crashstock market crash in April is a possibility every investor should take seriously.

The Trump rally sent stocks to record-breaking heights. Since Election Day, the Dow has soared 13% higher and it's up over 2,000 points in that span. But since the Dow hit its all-time high in early March, the rally has finally started to slow down. And that could signal the next stock market crash is on the horizon...

While no one can predict a stock market crash coming with perfect accuracy, there are signs that stocks have been overinflated by unwarranted optimism about the Trump administration. But as President Trump failed to repeal Obamacare and is pushing the United States into greater involvement in foreign conflicts, that investor optimism could quickly end.

That's why we want our readers to be prepared if there is a stock market crash in April. We're going to show you exactly why a market correction could send stocks spiraling down and how you can protect your wealth if it happens...

Why Overpriced Stocks Could Cause a 2017 Stock Market Crash

While predicting a market crash is impossible, we can look at what has caused stock market crashes in the past and compare it to today. And we are seeing many of the same signs that happened before past stock market crashes.

Before the stock market crash of 1929, the stock market was booming to new record highs.

In the six-year period between 1923 and the crash in 1929, the Dow rose over 300%. But this rise in stocks wasn't because of raw economic growth, a big reason was speculation. Amateur traders and investors alike believed stocks would only rise, and they were willing to take excessively risky bets on stock prices.

This sort of speculation helped push stocks to astronomical highs, but it meant also meant the prices were unjustifiable. When stock prices started to stall in 1929, traders panicked. They had to sell.

As a result, the Dow crashed by losing 86% of its value between 1929 and 1932. On Sept. 29, 1929 - Black Tuesday - the market fell by 10%. The panic was so severe some people couldn't sell their stocks at any price.

And the same thing happened before the Great Recession in 2008.

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This time, speculation about housing prices sent home prices soaring. Between 1996 and 2006, home prices surged by 100%. This jump in housing prices led buyers, mortgage lenders, and Wall Street to make extremely risky decisions.

Buyers were purchasing houses they couldn't afford, banks were lending to unqualified buyers, and Wall Street firms were packaging up these risky mortgages to sell them as grade "A" securities.

These risky bets paid off as long as home prices kept rising, but when prices flattened, the market tanked. The resulting financial crisis was so bad some Wall Street firms like Lehman Brothers closed down and others - from Wells Fargo to Citigroup - needed a bailout from the federal government to stay afloat.

And now we are seeing some of the same signs in the current stock market. That's why a stock market crash in 2017 could be coming...

Low Interest Rates Have Inflated Stock Prices

During the Great Recession in 2008, the U.S. Federal Reserve slashed interest rates from over 5% to 0.25%. Cutting interest rates was meant to make borrowing money cheaper. And the Fed hoped businesses would take advantage of cheaper borrowing costs and use the money to expand and grow the economy.

But U.S. businesses borrowed money just to buy back their own stock instead. Since 2008, publicly traded companies have borrowed $1.9 trillion, and they've repurchased over $2 trillion in shares of their own stocks.

That's boosted stock prices, but it also means they are unsustainably high.

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Just look at the famed Shiller PE ratio. The Shiller PE ratio is one of the best measures of stock market value, and it's currently at 29.11. That's 74% above its historical average. That's a big deal, because it's higher today than it was before the 2008 stock market crash when it hit 27.4.

And now the Federal Reserve is committed to hiking rates gain. On March 15, the Federal Reserve raised interest rates for the third time since 2008, and Fed officials have signaled potentially two more rate hikes are coming this year. Just this week (April 10), Fed Chair Janet Yellen said the economy is "pretty healthy," meaning she's prepared to move forward with more rate hikes.

But higher rates are coming as stocks have just finished a record-breaking run during the Trump rally. That combination of overinflated, all-time high stock prices with quickly rising interest rates could mean a stock market crash in 2017 is on its way.

That's exactly why we want our readers to be prepared for a market crash in April. And we have a plan that can protect your money during a stock market crash, with the potential to bank major profits during a recovery, too...

Our 2017 Stock Market Crash Protection Plan

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A good market crash protection plan maximizes the upside and protects against the downside. That's why we don't believe investors should flee stocks during a crash, but should instead own stocks that will power through a downturn.

Money Morning Chief Investment Strategist Keith Fitz-Gerald recommends buying stocks that benefit from the "Unstoppable Trends" of health, technology, war, energy, demographics, and scarcity. These trends arise from long-term global factors, and they aren't going to go away just because the market dives.

And by owning well-managed companies in the Unstoppable Trends, smart investors will be primed to reap the benefits of the eventual recovery. Investors who panic and sell stocks will be missing huge growth opportunities. That's why we recommend Unstoppable Trend stocks like these.

Raytheon Co. (NYSE: RTN) is a classic Unstoppable Trend stock. War, terrorism, and general ugliness are unfortunate realities, but you can be sure this trend isn't going away. Countries like the United States are always going to need defense and protection, no matter what the markets are doing.

And RTN is one of the leading providers of defense and security to countries around the world. Raytheon has billions in contracts with the U.S. government, including everything from missiles to cybersecurity. On top of that, Raytheon's contracts are diversified, with about 40% of them coming from overseas governments. That's going to protect your profits during a downturn and accelerate them when the market recovers.

RTN currently trades at $152.07 a share.

Microsoft Corp. (Nasdaq: MSFT) is another leader in the Unstoppable Trends. The entire world relies on technology to function, and that's true regardless of stock prices. Owning a leading company in tech can help protect your profits because it's going to be in demand no matter what.

Microsoft develops software and cloud-computing services relied on by millions of people across the world. And it's always innovating.

MSFT trades at $65.48 a share.

Becton Dickinson and Co. (NYSE: BDX) benefits from the Unstoppable Trend of demographics. The global population is aging, and that's doubly true for the developed world. But aging populations require more medical care than younger generations.

BDX is a leading supplier of medical lab equipment and one-time-use medical supplies commonly found in long-term care facilities. Aging populations in Japan and the United States will increase demand for these supplies. And that's why BDX will be a strong investment that will protect your money through the market's ups and downs.

BDX shares are currently priced at $183.78.

This "Secret" Helped Transform Two Teachers into Millionaires: Today Donna and Dave R. are retired millionaires who are also earning $10,000 a month in income. Much of their wealth is due to a Great Depression-era "program" most have no idea exists. Learn more...

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