We've all seen it at the start of the year. The global and economic market wasn't doing so well during the opening of trading in the year which made it a horrific week for Wall Street traders and an anxioous nerve for financial investors.
Oil prices continued to drop and China is teetering on the edge of economic collapse which makes everyone else nervous.
What's the good news and the bad news? The good news is last week's volatility is over. The bad news is the worst could be heading our way.
The Royal Bank of Scotland has recently warned all financial investors to "sell everything". By doing so, they are able to protect themselves from what market and financial analysts call a "cataclysmic year" that is looming on the horizon.
What does that mean?
RBS researcher Andrew Roberts explains that we are not out of the woods yet, saying...
...the world is slowing, trade is slowing, credit is slowing.
On his very glum note, he advised to sell everything except high quality bonds - wanting to focus more on the return of capital and not the return on capital. He emphasizes that investors should now save their skins since China has set of a tiny bomb that can soon explode and snowball into one big mess.
China has implemented circuit breakers twice already in a span of four days. Not only are investors losing confidence in the Chinese market but the U.S and European markets are also hurting.
China is slowing down and it is expected that the second largest economy, the first being the United States, will grow worse.
Mislav Matejka, an equity strategist at J.P. Morgan, reported and affirms Roberts' statement:
...the risk-reward for equities has worsened materially... any rally or positive uptick should be viewed as an opportunity to sell and get out of the market.
Though the outlook for the global economy looks glum, analysts did note that this is not an indication of the "end of the world". For some analysts, it means that things are going to slow down tremendously. Predictions are still being forecasted, notes have indicated.
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