In today’s post we discuss the predicted stock market crash and explain how insurance agency owners can prepare. 
There was disturbing news when several reputable experts revealed their prediction that the stock market will plunge by 50% or more. Mark Spitznagel, a hedge fund manager who is famous for his profitable billion-dollar bet on the 2008 crisis, believes that the financial collapse is imminent. Billion-dollar investor Warren Buffett is also preparing for a crash as his “Warren Buffett Indicator,” also known as the “Total Market Cap to GDP Ratio,” is breaching sell-alert status. This is surprising given that the stock market has been improving since bottoming in 2009. The New York Stock Exchange is up 165% since early 2009 while the NASDAQ is up 275%. Nevertheless, a large number of important indicators suggest that there is a strong likelihood that the U.S. will experience a massive stock market crash.
So how do we avoid this catastrophe? It is tempting to sell all your stocks but there are others who argue that it is best to sit tight and see what happens. However, Sean Hyman, founder of Absolute Profits, advises everyone to hang in there and use the “secret calendar” to decipher when the best time is to sell their stocks. This calendar shows the exact dates in which to buy and sell certain investments. According to Hyman this calendar was initially developed by Wall Street insiders to take advantage of the ups and downs related to 19 different sector funds. He claims that investors can benefit from the added assurance of the Crash Alert System that he has invented. This will warn investors to go to cash by sending them a sell signal if the market starts to plunge. He urges everyone to subscribe to the Absolute Profits System in order to avoid financial ruin. He already has many followers as he has made bold accurate forecasts in the past. In a 2012 interview on Bloomberg Television, he correctly predicted that Best Buy would drop down to $11 a share and then it would go back up to $40 a share shortly thereafter.
My advice for insurance agency owners who have stocks is to allocate your assets sensibly. You must calculate the amount of cash you are going to need from your portfolio in the next few years and invest this amount in safer high-grade bonds. Then if the market crashes you could benefit by buying stocks at almost 50% off safe in the knowledge that the cash you need is tucked away securely. If you are worried about your business suffering from the effects of a crash then you need to evaluate it and look at ways to safeguard it.
We often ask owners a simple question. What would happen if the value of your agency increased by 25%? How would that impact your life? Interestingly, the answer is that it often doesn’t have any impact.
We then ask how their life would be impacted if the value declined by more than 25%. The results are often very severe. The market for insurance agencies changes just like the stock market. As most people know, this is a very strong market and values have increased significantly. We offer a free consultation to provide agency owners with guidance on the value of their agencies. It some cases, we take it to the next step and provide a formal valuation. If you are interested, please give us a call. Our contact information is provided on our website.
