by David Zeiler
In the financial markets, a black swan event is something that strikes unexpectedly and has a widespread, severe impact.
It's little wonder, then, that the media keeps referring to the coronavirus crisis as a black swan event.
But what investors want to know now is how long this will last and when might the market start to recover.
We found some important clues by looking at one particular black swan event from the past...
Nothing is safe during "global risk-off" events.
During extreme times of panic, cash is king.
Not even gold (down 3.5% yesterday) was safe.
You see, gold typically decouples and becomes inversely correlated during periods of stress.
Historically, it's a great long-term hedge, but in times like this, it can drop significantly in the short term too.
For perspective, take a look at what happened from the market tops in October 2007 to the depths of March 2009.
In that time, the S&P 500 dropped like a rock – down 56.1%.
So, what happens to stocks over the next 18 months is the big question on investors' minds.
Are we in the early stages of another recession?
This chart might have the answer...
by Mike Stenger
If anything can be called "good" news while the coronavirus fear tanks the market, current stock lows could turn into double or triple gains a few months down the road.
Our top penny stock to buy today is one of those, with 227% profit potential this year.
The CBOE Volatility Index – or "Fear" Index – is above 70.
It hasn't gone higher than 30 since 2011.
The Dow Jones Industrial Average lost more than 2,000 points this morning despite the Federal Reserve cutting interest rates to zero.
The central bank also introduced a quantitative easing program worth $700 billion.
Read for more on how stocks are reacting to the coronavirus news today.
The markets have been in an incredible free fall over the last three weeks.
But with sharp pullbacks come unique opportunities to buy stocks for the long haul.
There's been an insider buying trend in one of these top penny stocks recently.
And it could mean a 100% pop is in store for that penny stock this year.
by Shah Gilani
Don't believe anyone who tries to tell you that "demand destruction" resulting from the impact of the novel coronavirus across U.S. and world economies isn't going to result in a global recession.
They don't know the facts.
In fact, President Trump recently declared a state of emergency and as the virus spreads to all 50 states in America and infection rates around the world increase, demand in the U.S. and globally isn't just going to decline, it's going to be destroyed.
If the coronavirus isn't corralled and eradicated in the next three months, the U.S. and world economies are headed for recession, according to economists.
And if the virus isn't contained and killed off and infection rates haven't leveled off in six months, depression becomes a possibility.
There are two separate demand effects to consider...
by Shah Gilani
If you think the Fed's going to fire hundreds of billions or trillions of dollars of "stimulus" rounds at the coronavirus crisis and pierce its grip on mankind, on the market, and on the economy, you're wrong.
This is an existential threat to humans, markets, and economies, which the Fed's ammo can't kill – but it sure can make it worse.
Here's what the Fed's doing, what it's going to do, why it won't work, how you'll know it's not working, and how it's going to make everything worse… Full Story
"Black Thursday" 2020 will live in infamy as one of the worst days ever for the stock market, but the worst could be yet to come.
The Dow plunged 10% in one trading day on Thursday, making it the fourth worst day besides the 1929 stock market crash and "Black Monday" in 1987.
Today, we'll give you three steps to protect your money before it gets worse...
by Mike Stenger
We've entered a bear season.
Securities have fallen 20% from recent highs.
And it seems the markets get more uncertain with each day COVID-19 is around.
The spread of coronavirus is called a "black swan event."
It's the word for an unpredictable scenario that creates a more erratic market than normal.
Well, the gloom of a word like "black swan" isn't lost on anybody right now.
The CBOE Volatility Index (VIX) is up above 60.
For perspective, the VIX has barely broken 30 in the last 10 years.
What this means is, unfortunately, most people don't know what's going on.
Or what's going to happen.
But let's not forget, even in times like these, there is a right way to handle your money.
This week, the coronavirus has triggered two circuit breakers to halt trading. The viral panic over coronavirus has turned into a fiscal pandemic. The Dow is now off more than 27.6% from its all-time high in December. The index hasn't been this low since Summer 2017.
Panic is only increasing as the COVID-19 problem gets more serious. Many investors feel they're stuck riding this with no answer.
But that is not the case. If you're sitting on any cash right now, many U.S. companies are trading at very attractive valuations. This would be the time to buy some top dividend stocks to hold over the long term.
