“Will the stock market crash in 2024?”, is not such a crazy question as of late. Unfortunately, I see a lot of people planning on sticking around for too long in the stock market today. Many still think it’s a great party, but they should consider leaving.

Some advisors on TV say to stay in because the bull market isn’t going to end anytime soon. But just because it’s still going doesn’t mean it’s beneficial to stay.

An Important Newsletter from Paul Dietrich

I am not securities licensed, so this is not advice to buy or sell any security. Today, I’m sharing a newsletter from Paul Dietrich, the Chief Investment Strategist for B. Riley Wealth Advisors. This newsletter is very informative. Paul is an honest advisor who has helped his clients get out of the market to prevent something catastrophic from happening to their portfolios.

The newsletter is labeled, “Think You’re a Smarter Investor than Warren Buffett?” He starts by quoting a research paper from JPMorgan Chase arguing that many average investors have crowded into positions based on unrealistic expectations of earnings growth. These moves often lead to a “violent correction” when the excitement fades.

Key Points from Dietrich’s Newsletter:

- Big investors like Jeff Bezos and Warren Buffett are selling stock.

- They believe the stock market is overvalued.

- These investors are holding a lot of cash.

Cash Holdings and Institutional Investors

Dietrich proposes that many U.S. corporations are also holding cash. Total assets in money market funds have recently hit a record $6 trillion, nearly doubling over the past five years.

Cash Holdings by Corporations:

Corporation	Cash Holdings (in trillions)
U.S. Corporations	$4.4
Money Market Funds	$6.0

The Average Investor vs. Billionaires

So, why are average investors still buying into the stock market, chasing the AI boom and other tech stocks, when many founders are selling? It doesn’t make sense. Are average investors smarter than Bill Gates, Jeff Bezos, and Warren Buffett? No, they are not. And neither are their advisors.

Historical Patterns and Guaranteed Income

Right before most recessions, there is often a dramatic run-up before it crashes. We are in one of those run-ups now. When will it end? No one knows. But what goes up eventually goes down. When it does, it can drop rapidly and steeply.

Why the Market is Overvalued:

- Price Earnings Ratio (P/E Ratio)

- Dividend Yield

- Technical Indicators

Technical Indicators and Market Valuations

There are technical indicators to consider. The most common method compares the S&P 500 to its 200-day moving average. If the S&P 500 is significantly above its long-term average, it’s considered overvalued.

Current Market Indicators:

Indicator	Value
S&P 500 vs. 200-day average	12.5% above
Average Drop in Recession	36%

Real-Life Experience and Historical Recessions

In the past, there have been recessions that started long after the signals were initially triggered. For example, the 1969 recession began in the 24th month after the signal. Dietrich recalls moving clients into a defensive strategy approximately 9 months before the dot-com crash and was openly mocked for it, but it saved his clients from huge losses.

The Longest Bull Market in U.S. History

We’ve been living through the longest bull market in U.S. history since March 9, 2009. Usually, bull markets last between five to six years. But with recent economic challenges, it’s clear we’re heading towards a recession.

The Business Cycle and Recession Warnings

What more evidence do we need to see that we are moving into a recession? The signs are all around us. Wise investors should be skeptical of those saying we’re starting a new bull market. The natural business cycles of bull markets followed by recessions haven’t changed.

Protecting Your Money

Asking, “Will the stock market crash in 2024?”, isn’t about scaring people or spreading anti-stock propaganda. It’s a warning from those with vast sums of money. Billionaires are moving their money to cash, expecting something to happen. Now is the time to consider protecting your money, having a guaranteed income, or earning a healthy interest rate on a guaranteed basis.

In my last podcast episode, I did a case study on a couple who ultimately moved all their money into fixed instruments and money markets, earning 4.5-5%. We discussed a guaranteed lifetime income annuity plan for them, so even if the market crashes, they will be okay because their income needs are guaranteed and they will not be reliant on their investment portfolio in the future.

In this week’s podcast episode, I walk step-by-step through Dietrich’s newsletter and show some serious numbers that build a strong case for getting a large chunk of your retirement funds out of the stock market.

If you’re still heavily invested in the stock market, I highly recommend you give this episode a watch or listen.

Episode 36: Will The Stock Market Crash in 2024?