As Wall Street celebrates the bull market's 10th anniversary, seasoned experts are worried younger traders won't know what to do when it finally ends.
Since everyone learns from experience, people who have joined the financial industry or started investing in the last decade might not know how unusual those circumstances were. Longtime economists have two basic concerns: that younger Wall Street pros will fail to recognize when conditions change, and that they won't know what to do when it happens.
Rosenberg, 58, contrasts the millions of people who have taken jobs in finance in the past decade with his own career. He says he started a job at the Bank of Nova Scotia on Black Monday, October 19, 1987. TheIn the turmoil that followed Black Monday, Rosenberg says he learned how the market behaves in different types of recessions and how to evaluate numerous threats to stocks and the economy. He's not sure younger traders and managers are getting that kind of experience.
Hunt, 76, says the dominant trading styles of trading and analysis today could also turn into a problem because it's encouraging investors to focus on single economic indicators instead of the bigger picture. That's also one of Rosenberg's top concerns: traders have been practicing the same strategy for so long that they won't know when it's going to stop working — something that could compound their losses. For context, buying the dip is a strategy that involves scooping up discounted shares after a sell-off.
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