Crash or correction? Is it worth catching falling knives? Only one of them allows you to make a profit.
Not long ago, financial markets seemed stable. Inflation was retreating, interest rates were no longer rising dynamically, and investors were starting to return to risky assets with cautious optimism. But on April 2, 2025, the world came to a halt – at least for a moment – and the stock markets trembled.
Donald Trump, who resumed the presidency of the USA in January, announced widespread tariffs affecting practically the entire world. They hit China the hardest, but also spared no European Union countries or developing economies. A new trade war began – not a warning, not threats, but actual actions.
Markets react with blood
Within a few days, the S&P 500 lost over 7%, and the Nasdaq fell even more sharply. European indices also plunged. Investors began to withdraw capital en masse from the stock market, seeking safe havens.
Gold shines like never before
In this chaos, one asset did not disappoint – gold. The price of an ounce rose by 10% in just a week, reaching levels not seen since 2022. Why? Because gold plays its classic role in times of uncertainty: it does not yield interest, but provides peace of mind. In the face of inflation, dollar devaluation, and geopolitical uncertainty – it becomes a safe value.
The dollar weakens
The devaluation of the dollar is the result not only of the trade war but also of decreasing trust in US policy.
History knows this scenario
The Great Depression of the 1930s began with a stock market crash, but its deepening was due to protectionism – exactly like today. The Smoot-Hawley Act and spiraling tariffs plunged global trade and led to economic collapse. Is history repeating itself? Perhaps not literally, but it certainly rhymes.
Is it just a correction or already a recession?
This is the question every investor is asking today. Is it worth buying now, while "blood is being spilled," or is this just the beginning of a larger decline?
On one hand, the declines are painful and deep – reminiscent of the sell-offs of 2020. On the other hand, the trade war has only just begun, and the real effects – such as rising prices, reduced consumption, and falling corporate profits – are yet to come.
A recession does not come suddenly – it comes in waves. The first is the fear of investors. The second – a collapse of macroeconomic data. The third – actions by central banks. Currently, we are somewhere between the first and the second.
Gold and the Swiss franc as safe havens
The current situation confirms that in times of global shocks, capital flees to proven solutions: gold and the Swiss franc. Investors who previously diversified their portfolios can sleep more soundly today. The question is – should those who haven't yet jump onto the speeding train now?
Don't catch falling knives – yet
In classic investment wisdom, it is said: "buy when blood is being spilled." But it is equally often reminded not to "catch falling knives." Currently, the markets look as if the knife is just picking up speed. Fundamentals are not keeping up with the declines – and that means the bottom is still ahead of us.
For patient investors, this is a time for observation, not action. Those who want to secure themselves may consider gold, the franc, or commodity-based funds. But those who are counting on quick profits – should arm themselves with humility.
A time of testing for the global system
This is not an ordinary correction. This is not just the effect of one decision by Trump. This is the beginning of a paradigm shift in the global economy. Trade wars, deglobalization, dollar weakening, and new economic blocs – all of this means that we are facing a period of enormous volatility.
Is it already time to buy? For some assets – like gold – perhaps so. For stocks – not yet. The recession has not yet fully developed. And as long as that is the case, it is better to be more vigilant than greedy.
Not long ago, financial markets seemed stable. Inflation was retreating, interest rates were no longer rising dynamically, and investors were starting to return to risky assets with cautious optimism. But on April 2, 2025, the world came to a halt – at least for a moment – and the stock markets trembled.
Donald Trump, who resumed the presidency of the USA in January, announced widespread tariffs affecting practically the entire world. They hit China the hardest, but also spared no European Union countries or developing economies. A new trade war began – not a warning, not threats, but actual actions.
Markets react with blood
Within a few days, the S&P 500 lost over 7%, and the Nasdaq fell even more sharply. European indices also plunged. Investors began to withdraw capital en masse from the stock market, seeking safe havens.
Gold shines like never before
In this chaos, one asset did not disappoint – gold. The price of an ounce rose by 10% in just a week, reaching levels not seen since 2022. Why? Because gold plays its classic role in times of uncertainty: it does not yield interest, but provides peace of mind. In the face of inflation, dollar devaluation, and geopolitical uncertainty – it becomes a safe value.
The dollar weakens
The devaluation of the dollar is the result not only of the trade war but also of decreasing trust in US policy.
History knows this scenario
The Great Depression of the 1930s began with a stock market crash, but its deepening was due to protectionism – exactly like today. The Smoot-Hawley Act and spiraling tariffs plunged global trade and led to economic collapse. Is history repeating itself? Perhaps not literally, but it certainly rhymes.
Is it just a correction or already a recession?
This is the question every investor is asking today. Is it worth buying now, while "blood is being spilled," or is this just the beginning of a larger decline?
On one hand, the declines are painful and deep – reminiscent of the sell-offs of 2020. On the other hand, the trade war has only just begun, and the real effects – such as rising prices, reduced consumption, and falling corporate profits – are yet to come.
A recession does not come suddenly – it comes in waves. The first is the fear of investors. The second – a collapse of macroeconomic data. The third – actions by central banks. Currently, we are somewhere between the first and the second.
Gold and the Swiss franc as safe havens
The current situation confirms that in times of global shocks, capital flees to proven solutions: gold and the Swiss franc. Investors who previously diversified their portfolios can sleep more soundly today. The question is – should those who haven't yet jump onto the speeding train now?
Don't catch falling knives – yet
In classic investment wisdom, it is said: "buy when blood is being spilled." But it is equally often reminded not to "catch falling knives." Currently, the markets look as if the knife is just picking up speed. Fundamentals are not keeping up with the declines – and that means the bottom is still ahead of us.
For patient investors, this is a time for observation, not action. Those who want to secure themselves may consider gold, the franc, or commodity-based funds. But those who are counting on quick profits – should arm themselves with humility.
A time of testing for the global system
This is not an ordinary correction. This is not just the effect of one decision by Trump. This is the beginning of a paradigm shift in the global economy. Trade wars, deglobalization, dollar weakening, and new economic blocs – all of this means that we are facing a period of enormous volatility.
Is it already time to buy? For some assets – like gold – perhaps so. For stocks – not yet. The recession has not yet fully developed. And as long as that is the case, it is better to be more vigilant than greedy.
1 user upvote it!
0 answers