“Waiting for the bottom is a mistake, investors should buy now”

While many investors are “sitting on cash” waiting for the bottom of the bear market, billionaire David Rubinstein recommends that investors take advantage of the declines now. According to him, a person who invests for the long term with faith in companies, does not have to wait to catch the perfect bottom – because no one knows when it will be.

“People should not be afraid to buy stocks now,” said the founder of the Carlyle Group, “the biggest fortune in the investment world is often made by buying stocks in crises.” We will digress here and say that in the 2008 crisis, people who bought shares after a 20% drop in the S&P500 experienced another painful drop of over 40%, and it took them 3 years to recover their investment. We will make a reservation again and say that the crisis in 2008 was unusual and large on a different scale than the situation today.

During the last decade, there were not many “downs” when the US stock market was perpetually bullish, every rise was for a fall due to the lack of alternatives to the stock market. But now, the stocks have fallen into a bear market, and it seems that they are not recovering as quickly as investors are used to. According to Rubenstein, there are many stocks that are now at a discount with the S&P 500 down more than 20%.

According to Rubinstein, the pricing of the shares at the moment is attractive, in his opinion, in the next 6 months there will be an upside in the shares when the interest rate increases by the Fed and the policy will seep into the economy and affect inflation. “The Fed probably knows that interest rate hikes will lead to a hard landing and a recession in the US.” Rubinstein said the market is much closer to the bottom of the day than the top. He doesn’t see a scenario where stocks fall another 50% or 25% from current levels.

The one who agrees with Rubinstein is Bill Ackman, another billionaire, when according to him it will happen “as soon as people realize that the Fed doesn’t have to keep raising interest rates and will soon lower interest rates.” Goldman Sachs believes that the US economy is headed for a “soft landing”.

The pessimists:
Not everyone thinks like Rubenstein. Paula Volant, Rockefeller University’s vice president and chief investment officer, said the macro environment is “very scary to me,” pointing to issues stemming from Russia and China. She noted that her amount of cash now is the highest it has been at any point in her career.

Another opponent of Rubinstein’s views is the billionaire investor Stanley Druckenmiller who believes that the aggressive tightening measures and sharp interest rate hikes by the Federal Reserve will lead the US economy into recession. “Our main case is a severe drop in the stock market by the end of 2023.”

Ray Dalio, believes that the Fed may bring down the market very soon. According to a post he published on LinkedIn, he claims that raising the interest rate to 4.5% will lead to a 20% drop in the markets – “The higher the interest rates rise, the lower the markets will be and the economy will be weaker, more than everyone expects. The interest rate increases will reduce the increase in consumer credit, which will reduce waste theirs and in the end this is what will bring the economy down.”

Comments to the article(10):

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  • 6.

    Come on then

    anonymous

    29/09/2022
    16:10

    0

    0

    just nonsense

    closed

  • 5.

    All future increases are already priced (L.T.)

    emir

    29/09/2022
    15:55

    1

    0

  • 4.

    (L.T.)

    anonymous

    29/09/2022
    15:45

    0

    0

  • 3.

    Every opinion is two opinions and this is an economic newspaper

    Everyone says things without acceptance and the risk is on you so they said

    29/09/2022
    15:45

    0

    0

    Everyone says things without acceptance and the risk is on you so they said

    closed

  • It’s the truth. Your money is your risk.

    I am the boy

    29/09/2022
    16:07

    0

    0

    The decisions should also be yours. And you should be open to different opinions. And yet… everyone has an opinion and it is influenced by their worldview and perhaps more importantly by their position.

    closed

  • Load more
  • 2.

    Paul is dangerous for the economy

    Chechi

    29/09/2022
    15:42

    2

    2

    The man with a deathly hatred for stocks, is trying to settle a score with the markets after being stopped by Trump in 2017. Already then he tried to bring down the markets just by raising interest rates. Someone has to stop this man. It could bring the world economy to ruin.

    closed

  • It is indeed dangerous for the global economy

    anonymous

    29/09/2022
    16:07

    0

    1

    And that’s because he kept interest rates at zero and printed money all these years. Trump has done more serious damage that is being felt now. No one remembers Trump is no longer in the headlines

    closed

  • All over the world there were negative interest rates, this is an abnormal situation.

    grow up

    29/09/2022
    16:02

    0

    1

    I would lend you NIS 100 and you would pay me back NIS 90 in a few years. And all the risk that you won’t pay me back. It couldn’t last. What was created is a bubble. which has been inflated for more than a decade. Companies that grew to be worth billions while still losing money. Don’t worry the stock markets will go up again. sometime…

    closed

  • Paul became very obsessed

    Avi

    29/09/2022
    16:48

    0

    0

    There is a limit to every trick. You don’t drag the world into a recession because of 8 percent inflation. 8 percent inflation is better than a recession where people will have nothing to eat and no jobs.

    closed

  • 1.

    It all boils down to how much patience and deep pockets you have (L.T.)

    one of the people

    29/09/2022
    15:38

    1

    0

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