The Dow Jones has plunged more than 400 points since Monday's (Jan. 29) open, and the sudden downturn has investors wondering, "Will the stock market crash this week?"
That's not an unreasonable question to ask...
The Dow has surged 269% since March 2009, and it's rocketed 31% higher over just the last year.
The nearly decade-long bull market - the second longest in history - has pushed valuations to extraordinarily high levels. The cyclically adjusted price-earnings (CAPE) ratio has risen to 34.18, more than double its historical average. That's even higher than its peak, before the 1929 stock market crash.
With stocks soaring to such high levels, and with nearly 10 years since the last crash, it's no wonder investors see a sudden market drop as a sign that a stock market crash is coming.
But we aren't worried about a stock market crash this week.
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Market pullbacks, and even market corrections, are part of a healthy market. In fact, Money Morning Chief Investment Strategist Keith Fitz-Gerald even expects a market correction to happen in the first quarter of this year. But that's very different from a market crash.
"That sounds scary, but it doesn't have to be," Keith told us. Here's what he means, and why it's always important to have a plan to protect your money from a future market crash...
Why It's Essential to Prepare for a Stock Market Crash
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Keith says the coming market correction is simply a sign of a healthy, normal stock market.
"A lot of people forget the markets need buying and selling to move higher," Keith says. "It's a fundamental law of capitalism, and it's your key to bigger profits."
That means a downturn is simply a sign the markets are working, and Keith expects the Dow to soar to even greater heights in the future. He's projecting the Dow could even reach the 60,000 level...
But if you want to profit, you need to be prepared...
You see, investors are tempted to wait for a market correction, or even a market crash, before they take action. And trying to time the market by waiting for a major event to happen simply does not work.
In fact, investors need to prepare for a correction even when the markets are soaring.
Keith calls this one of the "single most powerful moneymaking lessons I have ever learned."
That means, if you're thinking about a stock market crash, or even a stock market correction, and you don't have a plan in place, now is the perfect time to make one.
And we have a complimentary, four-part strategy to help you protect your portfolio - and even profit - during the next downturn. Just click here to see how to protect your wealth in four simple steps...
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