One of the worst crashes in history is happening. But no one seems to be paying attention.
There’s a good reason for it. And that’s because certain market crashes put our daily lives into a tailspin…
A 50% stock market crash generally happens when economic calamity is underway. And if your home’s value crashes, a big chunk of your savings disappears.
Those crashes make headlines. But we brush others under the rug… because sometimes lower prices are a thing to celebrate.
The energy markets are a clear example. Lower oil and gas prices might hurt the companies producing those commodities… But for consumers’ wallets, it’s a big win.
That’s why the absolute devastation in the natural gas market has gone mostly unnoticed.
It’s the worst crash ever recorded by one measure. But history shows it won’t last forever. Instead, a 40%-plus rise is likely from here.
Let me explain…
The war in Ukraine passed the one-year mark in recent weeks. Energy prices were rising before the war began. But it became a catalyst for even higher prices.
Oil jumped well over $100 a barrel. And natural gas prices quickly doubled… hitting a 14-year high along the way.
The situation has taken a dramatic turn, though. Natural gas prices have fallen as much as 79% since peaking last August. And they’re now well below even prewar prices. Take a look…
This decline has been wild. Prices have dropped by more than 50% since December… something few would have thought possible given the situation with Russia.
To put the fall in context, we’ll look to history…
First, I examined all of the rolling six-month moves for natural gas since 1990.
According to that measure, natural gas prices dropped 70% over the past six months. And that’s the largest six-month decline we’ve ever seen.
Of course, what matters today is what happens next. To see it, I narrowed the field to 50%-plus six-month declines. They’ve happened six other times to date. And natural gas outperformed in the following years. Check it out…
Natural gas prices have pretty much stayed flat for the past 33 years. The typical annual gain has only been 0.5% since 1990.
At the same time, this is a highly volatile commodity. There are massive ups and downs along the way. And this decline proves it.
But history shows that even the worst crashes don’t last forever…
Natural gas was typically flat for six months after similar instances. But a year later, the commodity was up nearly 24%. And two years later, that gain ballooned to 42%.
We know for certain that natural gas prices will continue to be volatile from here. But according to history, betting that the recent crash will continue isn’t a smart move.
Instead, a multiyear move higher is likely on the way. So if you’re invested in the energy sector, it’s not time to give up yet. The gains of recent years can continue…
Good investing,
Brett Eversole
This Stock Could Go Up 66% or More [sponsor]Marc Chaikin built the system that isolated NVDA before it became the best-performing stock of 2023. Click here to get his latest buy. More here.
Source: Daily Wealth