Is the stock market going to crash in 2013?

My little brother is getting into stocks these days, which I love. He sends me stuff he’s reading & asks questions all the time. The most recent question he had was whether the stock market crash is going to happen. (he read this piece by one of those doomsday prophecy types that’s really just trying to sell books — there’s no shortage of dudes like this, don’t believe everything you read).

Here’s what I told him about the stock market crash:

It has some truth to it — but it’s definitely exaggerated. The author’s trying to sell you his book (using fear tactics). The truth is billionaires sell tons of stocks everyday. Those particular stocks they mentioned are probably overvalued — may not have anything to do with the economy. But yes, there could be a pull back soon — definitely be careful out there.

Is the stock market going to crash through the floor like this dude says? Probably not.

If you want a safe bet, you can buy commodity stocks (i.e. gold, silver, copper, etc.) — you can also go international. Brookfield Infrastructure Partners (BIP) is one of my favorites — they own & operate infrastructure — things like bridges, damns, water towers, etc.

But you have plenty of time — even if it crashes, just keep holding. It will go back up eventually. Just make sure that the companies you buy are healthy, profitable & reasonably priced. And always have some powder (i.e. cash) in your account. So that when things crash & people start freaking out… you back the truck up, double down.

Takes big balls to buy more when everyone’s scared, but that’s how people make money round these parts ya heard? No pain, no gain, right? No risk, no reward. Gotta balance that risk & reward — read a lot, do your homework & make smart decisions.

Hope this helps brotha. -Chris M.

What do you think? You think we’re going to see a big drop in stocks this year? Share your thoughts below.

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