I am a big fan of Big ERN's safe withdrawal tool. I have spent a lot of time playing with it trying out different numbers.

Among other things, one thing that gave me a lot of confidence is the idea that you can safely withdraw different percentage from your portfolio depending upon the market conditions. If the market is at all time high, your safe wathdrawal might be 3.5% but if the market experiences a 50% correction, you can in fact increase your withdrawal to more than 4%.

So for example, let's say you have a $2 million 60/40 portfolio today when the market is at all time high, and you are being conservative (or scared😅) and taking out only 3% ($60k). If let's say the equity market drops by 50%, your portfolio will fall to $1.4m. Now you can infact be much less conservative and start withdrawing 4.3% (again around $60k) from your portfolio. So in the end your spending will not need be impacted by the market correction.

Once I understood this, it gave me a lot of confidence in my plan.

The sell-off in tech stocks was more intense than I anticipated. Watching the S&P 500 fall below its 50-day moving average and the Nasdaq plummet from the open, honestly, the tension we all feel during such market shifts is truly nerve-wracking.

Interestingly, market sentiment changed so quickly. Just a week ago, everyone was talking about interest rate cuts, as if it were a done deal. Now, the market seems to be behaving as if the Fed is preparing to apply the brakes again. The VIX index soaring above 22 says it all.

I usually remain calm on down days, but today there was definitely something "off." Perhaps it's because some economic data was blocked… perhaps it's just another overreaction… or perhaps the market is trying to reassess reality.

Curious what's your current portfolio allocation? Staying put? Hedging? Or increasing holdings in your favored long-term investments?

I made some minor adjustments this morning, but I'm still observing how things develop next week.

Hey everyone,

I keep seeing people online and in the news / online saying things like “the market is going to crash soon.” “This or that is overvalued”, etc I’m not here to argue whether that’s true or not. I’m just trying to understand what that actually means in practice.

For the people who believe a crash is coming, what do they usually do about it? Do they sell their positions before it happens? Move to cash? Or do most just keep holding and wait it out?

I’m not asking for advice, just curious how people who expect a crash typically react or prepare.

Edit: thank you all! My question is answered, now I know :)

I finally invested heavily three months ago and we’ve had some big down days recently. I’m really worried about a crash with my luck. Of course I would pick the worst possible time to finally pull the trigger. It just sucks to see all that money disappear in a day. And not knowing whether it will be back by next week or whether it will be back in 10 years.

Is it when retail are forced to sell their positions, even at a loss because they lack the funds to cover bills, etc?

So like recession times? Is it when unemployment rates are high? is it when disposable income is at its lowest? is it when people can't affford new triple A games? etc.

The world right now is showing three signs which are very similar to exactly what happened before the Great Depression in 1929 and the dot com crash of the year 2000.

Which means most experts around the world are expecting a major market crash to happen, and we need to look at the strategy of what investors like Warren Buffet are doing right now and copy that to protect our wealth.

The first metric which is very similar is a valuation multiple in the stock markets called the Shiller P/E ratio. Now whenever it goes above the point of 32, it means a major crash is expected, exactly what happened in 1929 and the year 2000. And right now this ratio is at 39, which is 23% higher compared to the previous benchmarks, which means it's extremely risky.

Now, the second thing is actually this very interesting concept called the yield curve inversion. What does it mean? It basically means that, you know, in the short term, when you put money in the bank in an FD, the bank gives you higher return compared to when you make an FD for a longer duration. Now, this seems very counterintuitive, but this is one of the best indicators available in the world economy today to be able to predict a recession. And this yield curve inversion is showing up in the US market since October of 2022 to December of 2024.

( FD is same as HYSA in USA)

Now, while it has normalized and become okay right now, most economists are expecting that 18 months from December 2024 is where the crash will happen.

Now comes the third sign, which is concentration of valuation of the stock market index in a handful of stocks. And we are seeing exactly this in the S&P 500 or the US index, where out of 500 stocks, just seven stocks called the Magnificent Seven AI stocks hold 47% the value of the index. And most financial analysts around the world know that AI right now is in a massive bubble, which means over the next six to twelve months, a major crash is expected and the US stock market may fall by 30 to 40%, which will have ripple effects around stock markets around the world.

Now, in such a time, what is Warren Buffet doing? Well, right now practically close to 28% of his portfolio is just in cash and bank deposits, which is the highest ever allocation he's made to such assets in history. Earlier, he would maintain his cash and bank deposit portfolio share to just about 10% because he's expecting a major crash, which is why I would recommend, you know, you really need to look at diversification in your portfolio. Possibly have 20% of your portfolio in gold, about 20 to 25% in cash and bank deposits, and please, please diversify away from risky assets.

We have been hearing about the AI bubble for months now. Since theres a circle jerk of investing amongst mag7, all pointing to Nvidia.. everyone's on edge.

Liquidity is the concern as most are risk on and loading up margin to buy into this run.

Soo what happens when the Liquidity goes away? There's nothing left to prop up stocks. In return we will see a massive exodus similar to 2022. That was a entire year of suckage.

I dont have a crystal ball but history rimes. 2020-2021 = 2024-2025. Around end of 2021 started the decline that hurt alot of tech/spec holdings including crypto.

The difference here? We've had multiple years of living off fumes and running based on AI spend.. which if you ask me wont pay any dividends for a while. The true form of AI everyone wants to happen such as optimus bots, self driving, and whatever else are at least 5-10 years out.

Not to mention, the government shutdown concealed most likely very bad jobs data. Once we see the results of Sept, Oct and Nov it will prob shake alot of people out.

Maybe Im wrong though. Anyone think the recent drop in the market is a flash in the pan or are you siding more towards the markets cooling off big?

These companies are left holding up the stock market. If they fall, the entire market falls. And it’s the opposite if they all go up the whole market goes up. But the chart tells a different story of the recent trend. They are going up but rest of market is going down. Here is what i think of the stocks left holding up the market.

AAPL - weakness in innovation, losing growth

MSFT - might be overbought here

META - good ad business but questionable ai product profitability

NFLX - high pe might give back massive gains its had

NVDA - ai sales increase already priced in. everyone says 170 eoy yet price is stalling. People relying on eoy to save them usually not a good thing.

AMZN - aws has competition with new datacenter companies emerging. Needs to take on more debt just to maintain its margin intensive shipping business

GOOG - losing search dominance, ai is good but not perfect yet, to maintain ai dominance intensive spending must happen will affect earnings

COST - taking a hit from tarrifs, it had a monster run and might give back a lot of gains

TSLA - lead roles stepping down, doesn’t look good for promises of products happening.

I don't understand with Negative GDP/ Reports of soon to be Supply shortages/ layoffs/On off tariffs disruptions...and yet markets beginning to climb again..Yes I know we are still off the All time highs . Ty for any insight.

I wrote this last night, and I wanted to wait until the end of the day to confirm my thesis. Today, the Nasdaq ended at +333.14 on nothing except Fed saying that they will turn on the printing machine, which will devalue the dollar even more and send inflation to the moon. Everything below was my thought process last night. Additionally, the post below really helps explain why we're in deep trouble, but all of the retailers are focused on the stock market, and BlackRock and JPMorgan are telling us that we're in a recession (Stagflation).

https://www.reddit.com/r/WallStreetbetsELITE/comments/1jx4qr9/the_bond_market_crisis_explained_for_you_regards/

As I sit here watching the Nasdaq futures spike up 288 points, I can’t help but feel uneasy. With the combination of tariffs, an escalating trade war narrative, and unsettling movements in the bond market—particularly the 10-year and 30-year yields—it’s hard not to see this as a potential prelude to a market crash or at the very least, the beginning of a bear market. While nothing is ever certain in the markets, the recent behavior we’ve been witnessing isn’t just noise—it’s a glaring signal that something is fundamentally off.

When the Nasdaq starts swinging 500 points or more in either direction for several consecutive days, that level of volatility is not just abnormal—it’s a red flag for deeper market instability. This pattern often precedes or accompanies systemic crises and tends to be driven by a combination of macroeconomic disruption, loss of confidence, and major repositioning by institutional investors.

There are typically two major factors that contribute to such extreme and sustained volatility.

First, extreme volatility reflects a market grappling with uncertainty, crisis, or both. Markets do not move wildly without cause. These kinds of large, daily price swings often indicate that investors are trying to price in the unpredictable—be it a geopolitical threat, economic policy shifts, or a financial system under pressure.

What’s especially concerning now is that we’re not dealing with just one variable—we’re contending with all of them. The current economic backdrop includes unresolved trade tensions, shifting policy (playing chicken with a country that had no problem killing 40-80 million of its citizens), and geopolitical conflicts with unclear outcomes. On top of that, corporate earnings season has revealed a growing sense of uncertainty within companies themselves. A number of major firms have stopped issuing forward guidance, signaling that even CEOs and CFOs are unsure about what lies ahead. One of the most notable examples was Target, which essentially admitted, “We don’t know.” When corporate leadership starts to lose visibility, that lack of confidence trickles down through the markets.

The second driver is institutional repositioning. When large funds start rapidly rotating out of certain sectors—most commonly tech and growth—and into safer or more defensive holdings, the size of those movements alone can send markets soaring or tumbling. In addition to this rotation, institutions may begin to hedge more aggressively or unwind leveraged positions, creating massive capital flows that can spike volatility. This is why we're seeing large green and red days for no reason.

Interestingly, several articles have surfaced this past week discussing these very moves—rotations, de-risking, liquidity tightening—but I initially dismissed them as overblown headlines. In hindsight, I think they were onto something, and I wish I had saved those links for reference. The market may be telling us more than we realized.

These patterns of extreme volatility aren’t unprecedented. In fact, we’ve seen them during some of the most turbulent periods in recent history. Two notable examples are the 2008 Financial Crisis and the COVID Crash of 2020.

During the 2008 collapse, from September 15 to late November, the market experienced around 30–40 trading days of repeated 500+ point swings in the Nasdaq. Some notable days include:

• October 13, 2008: +11.8%

• October 15, 2008: -8.5%

• October 16, 2008: +5.5%

These weren’t isolated events—they represented a market that was fundamentally broken and trying to reprice risk in real time.

The COVID Crash followed a similar pattern. From February 20 to March 23, 2020, the Nasdaq saw around 23 trading days of violent swings:

• March 12, 2020: -9.4%

• March 13, 2020: +9.3%

• March 16, 2020: -12.3%

• March 17, 2020: +6.2%

In both cases, the VIX (Volatility Index) spiked sharply and remained elevated for weeks. Interestingly, we’re seeing similar VIX activity this week—bouncing up and down erratically—yet another clue that something deeper may be brewing beneath the surface.

Markets are complex and unpredictable, but they also follow patterns. When you see repeated, outsized swings like we’re witnessing now, history tells us it’s rarely a coincidence. It’s often a sign that the system is under stress and that market participants—both retail and institutional—are struggling to price in risk accurately. Whether we’re on the cusp of another crash or entering a turbulent bear market, the warning signs are flashing.

This isn't normal.

As I am rereading this, CNBC is reporting that retailers are providing exit liquidity for institution to exit.

Retail investors are running head first into this topsy-turvy market Retail investors are running head first into this topsy-turvy market

https://www.cnbc.com/2025/04/10/retail-investors-are-running-head-first-into-this-topsy-turvy-market.html

The current problems that we have are

1. Bond market crisis

2. Stagflation scenario

3. Geopolitical threat

4. Economic policy shifts

5. Mortgage rates surge over 7% as tariffs hit bond market. https://www.cnbc.com/2025/04/11/mortgage-rates-surge-tariffs-bond-market.html

The money printer will make this worse. Lowering the rate will make it worse. Increasing the rate will make it worse. There is no easy way out of this.

https://finance.yahoo.com/news/market-crashing-eyes-buyers-backing-131601496.html

Power up the flux capacitor, climb aboard your DeLorean and prepare to travel back to 2008 because recent headlines concerning a real estate market crash seem very familiar.

The main differences between today’s imploding market and that of 17 years ago were that in 08, bad mortgages and over-inflated house prices were the issue. Today, high interest rates, soaring insurance costs, economic fears, and stubborn inflation are the primary problems. The results, however, are pretty similar — much of the U.S. is becoming a buyer’s market, according to a recent report by Redfin (NASDAQ:RDFN).

I think it's safe to say that today’s events were a clear display of blatant market manipulation—something that many of us witnessed in real time. While some may find humor in the sudden surge marked by oversized green arrows and irrational price action, I genuinely believe this is one of the most short-sighted and dangerous moves this administration—or those behind the scenes—could make.

There have been countless posts, and even a few individuals pointing out exactly how the manipulation occurred. What we saw today wasn’t just a fluke or anomaly—it resembled, in both form and consequence, the kind of market dislocations seen during China’s stock market crash and even the 2008 financial crisis. These kinds of unnatural market behaviors, when left unchecked, have serious implications—especially for foreign investors who are already growing increasingly cautious.

https://x.com/unusual_whales/status/1910033260975165836

When foreign investors perceive that the U.S. stock market is rigged or manipulated, they begin to lose trust. And when trust erodes, capital flight follows. These investors start withdrawing their money from U.S. equities and reallocating it into markets they perceive as more stable, transparent, and fair. This withdrawal of capital leads to declining stock prices—especially in sectors that rely heavily on foreign investment—and a sharp drop in overall market liquidity.

And let’s not forget: the 2008 crash was, at its core, a liquidity crisis. Once liquidity dries up, even healthy companies can become victims of a broader market freeze.

Historically, the U.S. has been seen as a safe haven for global capital—thanks to strong institutions, robust regulatory oversight, deep market liquidity, and a relatively low tolerance for corruption. But if today’s behavior continues—and is either tolerated or encouraged—the reputation of U.S. markets will suffer. Investors will start to question the credibility of institutions like the SEC and doubt whether fair play is even possible.

This loss of faith won't just affect retail investors—it will reverberate through the largest and most conservative pools of capital: pension funds, foreign sovereign wealth funds, insurance companies, and long-term institutional players. These are not gamblers—they’re looking for stability. And if they begin to see the U.S. market as a casino, they’ll exit quietly but decisively.

We’ve been down this road before. In 2008, trust in U.S. credit markets collapsed globally. It took massive bailouts and sweeping regulatory reforms to even begin to restore confidence. If we continue on this path—where the bond market is screaming that we're in serious trouble, while the stock market artificially surges due to manipulation—we’re heading toward something even worse.

This is shaping up to be the mother of all crashes. And when it happens, we won’t be able to say we weren’t warned. The signs are there, flashing in broad daylight.

So, rn the DOW is 39k. It was around 42k a few days ago.

A year ago it was 32k

In 2015 it was around 15k

So while I understand that going down from 42 to 39 is a bad crash, the fact that it’s more than double what it was 10 years ago, should mean something right?

The fact that it’s still higher than 1 year ago, should mean something right?

Were it to crash down below what it was a year ago, then I could understand the issue. But if it’s still higher, it’s still higher. Unless you’re like, day trading basically.

Now ofc, the Dow isn’t the only thing. But it’s the one I’ve looked at so. Yknow.

I’m sure it is the question on everyone’s mind, and while I am no fortune teller, I’d like to share few thoughts on the subject:

1. Current policy of the Trump administration is completely misguided, confused and, if continued, will inevitably lead to a major crash. Not just a market crash, but an economy crash. US is not in a position to internalize all production; it can’t happen, it won’t happen. We can maybe strangle the market enough to get some of production back, at a great cost to the consumer and with huge sacrifice to the level of life. This is what almost every economist understands, and this is why almost no one believed this is their real goal. Most economists do not believe anyone can be that misguided on the implications, and therefore we looked at it as a “negotiation technique” rather than a policy. Unfortunately, it looks more and more like this IS a policy. If so, markets will undoubtedly exert more and more pressure on the government, as they already do. And the weakest point is not the equity market, but the bond market. There’s very little anyone can do if bond market begins to crumble, because any attempt to artificially support it by the Fed will lead to other problems.

2. If the plan is to hold negotiations, or if the plan is adjusted towards negotiations, we have a better chance to get out of it with minimal losses, but even then market crash is still a real possibility. First of all, trust in US government is already damaged, and it’s not coming back, not until the next administration, if ever. There are moves being made now by the major players, and they will not be reversed. It will become manifest in the economy weeks and months from now, affecting interest rates and unemployment levels. Nothing anyone can do to reverse this. Second, markets were overpriced even before the current madness, but there was a general belief they will hold despite common sense, since there was no particular reason for them to go down. Well, now they did go down. That logic no longer works. The boat has sailed, it’s not coming back to port. Even a complete, 100% reversal of this misguided policy is not going to bring us back to the situation before the Second Fools’ Day (also known as “Liberation from common sense” day).

3. My personal strategy now is to shift everything into European bonds and inflation protected securities, as those are safest assets. I would not invest into stocks or bonds until the market has settled. It will probably take months, if not years, to see full effects. I would not keep too much $ cash either, because of the possibility that bank accounts will be frozen and exchange rates drop to the point that up to 50% of US dollar value could be wiped out. FDIC insures nominal amount, not a real value. If you want to keep cash - look into a basket of currencies, including Swiss frank, Euro and Pound. Best if it’s held in a foreign bank, although there are problems with opening and holding foreign bank accounts for most people.

This is my analysis. Feel free to disagree.

Made with yfinance lib data in Pyhton

Though they varied in length and severity, the market always recovered and went on to new highs. When will the next bear market happen—and when it does, how long will it take to recover? It took the US stock market 18 months to recover from its most recent bear market—the downturn of December 2021, which was spurred by the Russia-Ukraine war, intense inflation, and supply shortages.