If you think that the United States stock market is substantially overvalued then you would be correct. Here is a two-bit cigar!
Fund managers believe that U.S. equities are the most overvalued they have been since the dot-com era, says a new survey by Bank of America Merrill Lynch.
According to the study, 81 percent of respondents believed that U.S. stocks are overvalued, and that there may be a March or April risk rally “pause.” The last time they were this overvalued was in the year 2000, the height of the dot-com bubble.
Meanwhile, when it comes to international markets, 44 percent reported that emerging market equities were undervalued, and 23 percent said eurozone equities were undervalued.
What will be this bull market’s ultimate demise? The top three choices were higher interest rates, protectionist policies and weaker earnings.
This comes as the U.S. stock market had its worst day of 2017. The Dow Jones Industrial Average and the S&P 500 suffered a one percent loss. Some experts are suggesting that investors are beginning to lose faith in President Donald Trump.
But this has a lot more to do than with the real estate billionaire mogul. The U.S. is gradually coming to the bust phase of the business cycle (SEE: 17 signs a recession is coming). The U.S. is on the verge of repeating both the 2000 dot-com burst and the 2008 economic collapse, and you can see Snap Inc (NYSE:SNAP) as an example of this. This is a company that hasn’t generated a single penny of profit, but has a multi-billion-dollar market cap – at least Wall Street sees it since the tech firm only has one “buy” rating.
A recession is coming, but will be postponed as long as the Federal Reserve keeps the printing press going.
Perhaps it is time to take advantage of the inexpensive bullion prices and start putting your money into precious metals.
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