Sell everything ahead of stock market crash, say RBS economists !

Investors face a “cataclysmic year” where stock markets could fall by up to 20% and oil could slump to $16 a barrel, economists at the Royal Bank of Scotlandhave warned.

In a note to its clients the bank said: “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” It said the current situation was reminiscent of 2008, when the collapse of the Lehman Brothers investment bank led to the global financial crisis. This time China could be the crisis point.

Stock markets have already come under severe pressure in 2016, with the FTSE 100 down more than 5% in its worst start since 2000. In the US, the Dow Jones industrial average has made its poorest ever start to a year.

Oil prices have also fallen sharply on fears of lower demand and a supply glut, especially with Iran due to start exporting once more when sanctions are lifted.Tensions between Iran and Saudia Arabia make it less likely that Opec can agree to cut production to halt the slide in prices. Brent crude is down another 1% at $31.18, its lowest level since April 2004.

Investors have been spooked by fears of a severe slowdown in the Chinese economy and a fall in the value of the yuan, not helped by a crash in the country’s stock market despite attempts by the country’s authorities to curtail selling.

Andrew Roberts, RBS’s credit chief, said: “China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous, and we have hardly even begun to retrace the ‘Goldilocks love-in’ of the last two years.”

https://www.theguardian.com/busines...head-of-stock-market-crash-say-rbs-economists
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By the way, I feel that this is a good time buy. Invest small amount every day on dips. Anyways market is in Roller Coaster mode - half day up half down!

I personally bought Granules, Tata Motors, Astra Microwave, Nandan Denim, Icici bank.

Happy Fishing !

 

It is too much volatile. Up and down too much. Not a happy situation. I think we have to hold the stock tightly without worrying about volatility that is the only way to survive situation IMHO

 

Good stocks instead if ICICI is capf or repro better. Better asset quality. Also ICICI is too big large cap stock. Mid cap is better with same or better quality

 

Tata Motors: - Seems great.

ICICI: - Avoid banking stocks for some time.

Granules: - It has run into some trouble with US FDA plz check that up before increasing investment.

I think it is better to wait and watch for some time. If global situation stabilizes then we can consider some investment in good shares.

 

Dear Rama Sir,
Please review the above info and add your valuable comments - whether this is applicable for Indian investors also...?
Regards
Krishnan

 

No need to sell every thing, just hold on to fundamentaly strong shares,they will surely bounce back.I see a slow but sure Recovery in Quality Stocks because of two reasons. First Speculators along with their Heros will be decimated ,which will restrict Indian funds flow to Quality Stocks in concentrated way.Second because of turmoil around the Globe,India will be left out with atleast 6 to 7% growth,still fastest in world,and FII money will flow back in few months.In my view after if NIFTY falls 5% more,you can start buying without fear in scattered way in Quality Stocks.After 3 rd quarter results stock market will stablise ,and boys will be separated from men's for further journey.

 

Dear all,
I think no need to take seriously these RBS Guys .
If they are so much expert they should have predicted the fall of crude to 40 .
Now when crude is in 30s , they are talking about 20s . Definitely they do not understand the India market .
Its pity to see these highly paid brainless peoples coming up with such baseless predictions .

Thanks & Regards,
Prashant