Cramer: This market has eerie parallels with 2018. Here's what investors should do
CNBC's Jim Cramer sees parallels between today’s market and the fall of 2018, when rising rates and geopolitical tensions preceded a 20% S&P 500 sell-off.
The market is showing signs that are reminiscent of the fourth quarter of 2018, according to CNBC's Jim Cramer. Back then, a combination of rising interest rates and heightened geopolitical tensions led to a 20% sell-off in the S&P 500. For investors, this comparison is worth paying attention to, as it could signal a potential shift in market sentiment.
Rising rates, in particular, have been a concern for investors in recent months. As the Federal Reserve has been raising interest rates to combat inflation, some investors have grown worried about the impact on economic growth and corporate earnings. Add to that the ongoing geopolitical tensions, and it's easy to see why some investors might be getting nervous. Historically, when rates rise and tensions escalate, investors tend to become more risk-averse, leading to a decline in stock prices.
So what should investors do? For now, it's essential to keep a close eye on interest rates and any developments on the geopolitical front. If rates continue to rise and tensions escalate, investors may want to consider rebalancing their portfolios to reduce their exposure to more volatile assets. Additionally, investors should focus on companies with strong fundamentals, such as solid earnings growth and low debt, which tend to perform better during times of market uncertainty. The next few weeks will be crucial in determining whether these parallels with 2018 will continue to play out.
Originally reported by cnbc.com. LargecapNews adds analysis for finance & markets readers.