Bert Dohmen’s Wellington Letter warns investors that current market selling signals the beginning of a bear market, not an opportunity for bargain hunting. The analysis points to stocks plunging through support levels on high-volume selling, indicating a potential “liquidation bear market.”
The report claims that a recession has been masked by misleading economic data during the Biden administration, and once an official recession is recognized, institutional investors will shift massive allocations from stocks to bonds. With stocks at record overvaluation levels combined with limited liquidity, Dohmen advises readers to avoid bargain hunting and ignore any temporary bounces.