Welcome to Dividend.com. Please help us personalize your experience.

Select the one that best describes you

Thank you!

Check your email and confirm your subscription to complete your personalized experience.

Thank you for your submission, we hope you enjoy your experience


Pricing
Go Premium Now
Login
Best Dividend Stocks
Ex-Dividend Dates
High Yield Stocks
Strategies
Tools
Articles
Premium
Advisors
Guaranteed Income

Wall Street with american flags

News

Market Wrap-up for Apr. 9 - Dimon Warns of Looming Crisis

Stoyan Bojinov Apr 09, 2015


J.P. Morgan’s (JPM ) lead man, Jamie Dimon, outlined a number of “trigger events” that could spark the next round of volatility across the global financial landscape in his annual letter to shareholders.


The bank’s CEO issued a subtle warning in his annual letter to shareholders on Thursday, stating that, “The trigger to the next crisis will not be the same as the trigger to the last one – but there will be another crisis.”


Different Roots, Same Volatility


History doesn’t repeat itself word for word, but it sure does rhyme. According to Dimon, some of the so-called “trigger events” that may spark the beginning of the next financial crisis are as follows with historical parallels listed in parentheses:

  • Geopolitical (1973 Middle East Crisis)
  • Fed-induced recession due to rapidly rising rates (1980-1982 recession)
  • Commodities price collapse (oil’s decline in the 1980s)
  • Commercial real estate crisis (early 1990s)
  • Asian Crisis (1997 currency crisis)
  • Over-inflated Bubbles (2000 internet bubble & 2008 housing bubble)

Dimon went onto note that the next crisis could spark an even more volatile reaction than the last one because the increased regulations and more-stringent capital requirements for banks could dampen their ability to act as a so-called “buffer” against shocks across financial markets.

Amid the looming risks and countless predictions for an impending crash lies a simple question — that is, what’s the average investor to do?

For conservative, long-term minded income investors, the short answer is nothing. If you need a reminder as to why we’re opting to remain cool, calm, and collected ahead of an impending storm, be sure to read about Why We Prefer Bottom-Up Analysis.


The Bottom Line


By focusing on high-quality companies that have a proven track record of raising their distributions through the good times, the bad, the booms, and the busts, you increase your chances of success over the long-haul. The key ingredients for the “secret sauce” that separates average investors from very successful ones is having a clearly-defined asset allocation strategy and the emotional fortitude to stick with it, even when the so-called herd is running in the opposite direction.

Be sure to follow us on Twitter @Dividenddotcom

Popular Articles