Ted Bauman: Preparing for a Possible Stock Market Decline

The bulls remain in control of the US stock market and even with record stock valuations, most investors remain optimistic in this market. Other individuals, such as Ted Bauman, would probably start to adopt a more contrarian view of the market in present circumstances. Mr. Bauman is an economist who takes the less popular approach to the financial markets and preaches individuals to focus on defensive investing strategies to build long-term wealth. Ted Bauman traveled to South Africa in his earlier years and would earn his economics degree at the University of Cape Town. He devoted several years working with Habitat for humanity and has over twenty years’ experience working on housing projects for the less fortunate. These days he specializes in wealth preserving tactics an individual should follow.

Ted Bauman feels that the stock market could easily tank due to the record high valuations but that there could be an immediate bounce back after a decline. He brings up the year 1987, where out of nowhere the stock market plunged an extreme amount in just one day. There was panic selling and most of the investing public sold almost all their positions. The smart investors did not panic and held through the decline. The real savvy investors bought into the market at the decline. The individuals who held in the market and did not panic ended the year with a ten percent profit. This is a potential scenario Mr. Bauman feels investors should be prepared for.

Ted Bauman does not share the same enthusiasm as many of the investors currently have about US equities and believes they will return to fair value. He advises investors that when stocks start to fall, the process can take over a year before the investor realizes it’s a bear market. When the mentality of market participants flips, investors will no longer be seeking risky assets and will try to park their money in safer areas. Ted Bauman also points out that the current hawkish stance that the federal reserve is taking is eventually going to weigh heavily on the stock market. He advises strongly against trying to time the market. To know more about him click here.