'Sell everything NOW before 50% crash as Putin drives nail in bull market' - dire warning

The stock market crash is set to crash by 50 percent as the Russian invasion of Ukraine triggers global instability and inflation skyrockets. Shares are already hugely overvalued and investors should sell now and move HALF of their money in cash as protection, he said.

The claim, by respected independent financial adviser Brian Dennehy, managing director of FundExpert.co.uk, will add to fears the stock market could crash and wipe out the value of ordinary people's pension and Isa savings.

Yet it goes against traditional financial advice, which is that investors should never sell up following a geopolitical shock, but stay calm and sit tight.

Stock market movements are unpredictable and trying to second-guess them is dangerous and often backfires.

Yet Dennehy insists this time is different. He said US and global share prices have been driven far too high by more than 12 years of record low interest rates and central bank of stimulus.

“This policy error has pumped up a huge and dangerous bubble of overvaluation."

Interest rates have actually been falling for 40 years – in the US the federal funds rate hit a peak of 20 percent in June 1981.

That interest rate is unthinkable with the US funds rate standing at just 0.25 percent today, but that will change with the Fed expected to start hiking rates at its meeting on March 15-16.

Years of low interest rates have triggered “investor mania", people piling to US tech giants such as Amazon, Apple and Tesla, as well as crypto-currencies such as Bitcoin, in a rush to make quick money.

The mania has spread elsewhere, Dennehy said, with "a crazy number" of gambling in sports betting adverts on TV.

"The foundation of today's mania was laid by 40 years of falling interest rates. Although built over years, a bubble can go pop overnight."

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As Putin presses on with his invasion of Ukraine, stock markets falls of 50 percent can be expected, Dennehy added."There will be a nasty chain reaction as waterfalls and inflation has higher."

Energy prices look set to rocket as western countries impose sanctions on Russia, which provides a third of Europe's gas.

Putin could also launch cyber attacks against Western stock markets, adding to the risk.

Dennehy now expects the worst-case scenario: “50 per cent cash levels are recommended.”

Other advisers disagree, including Jason Hollands, managing director of investing platform Bestinvest.

He said history offers a comforting lesson as stock markets quickly recover from an initial stock market crash. “On average, losses resulting from geopolitical events are erased within just one month.”

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Hollands urged investors to stand firm. “Chopping and changing your investment portfolio in reaction to news events is fraught with risk. It can be like trying to change an aircraft engine mid-flight.”

This happened on Friday, when the FTSE 100 rebounded by almost 4 percent. “The worst days for markets are often followed by some of the best days, so it is often the case that private investors can be caught short when making switches while prices are lurching all over the place.”

Richard Hunter, head of markets at Interactive Investor, said investors will always face short-term volatility, but should stay calm and hold on for the long term, when history shows that stock markets outperform.

Investment is a marathon not a sprint, Hunter said. “It is difficult to remember in this environment, but should offer some solace to long-term investors.”