Its difficult to say ...
In spite of all the great advice our parents and grandparents gave us when we were growing up about living within our means and saving for a rainy day, we’re now at a time where two generations of adults have lived beyond their means and have no savings. Up until a couple of years ago, most of these people managed the unexpected expenses and setbacks in life by tapping into their home equity or taking on more debt.
When you combine the lack of savings with the lack of easy to access credit and the loss of equity in the housing market people don’t have many places to go to get more money. The most liquid asset many people still have access to is their stocks, bonds, etfs or mutual funds (inside or outside their 401k/RRSP).
What this means is the market will continue to fall as long as the economy continues to get worse, and the people who have cash to make investments at the bottom could potentially benefit by picking up stocks with a 2.5 p/e ratio and/or a 20% yeild.
