Our Weekly Podcast and Market Overview from Quilter Cheviot

Market Bubbles

By Alan McIntosh, Chief Investment Strategist

“Veteran investor Jeremy Grantham believes that the long bull market in the US has now developed into a fully-fledged bubble. We have seen many investment bubbles throughout history, the most recent being the dot-com boom just over twenty years ago and the US housing market, which led to the financial crisis of 2008. So what are the signs of a bubble and what can lead to it finally bursting? Firstly, there is no all-encompassing definition of a market bubble. Jeremy Grantham points to certain exuberant investor behaviour such as the soaring price of bitcoin, new companies listing on the stock market seeing their share prices double on day one and other speculative activities. These, in his view, are warning signs that there is over-confidence building into markets. Combine that with historically high stock market valuations and you can understand these concerns.

However, there are other reasons to suggest that while stock markets may look expensive, they are not necessarily in bubble territory…”

Read more here… Quilter Weekly Comment – Market Bubbles