Risk on the Rise
We believe that the economic and financial imbalances caused by the prior bubble have not been corrected, and have actually gotten worse, thereby creating serious problems for the economy and the market.
At the same time the market remains highly overvalued in terms of price to earnings ratios and other relevant metrics.
Although the vast majority remains bullish, investors should retain some perspective and remember that the crowd is always optimistic at market peaks. After all, by definition it is this very attitude that actually causes the peak.
In our view, the market's 27-month upward move is a cyclical bull market within a secular bear market, and it is now giving definitive signs of running out of steam. Although an oversold rally is still possible, we believe the market is extremely risky at this time.
The Big Picture: Risk is on the Rise
At the same time the market remains highly overvalued in terms of price to earnings ratios and other relevant metrics.
Although the vast majority remains bullish, investors should retain some perspective and remember that the crowd is always optimistic at market peaks. After all, by definition it is this very attitude that actually causes the peak.
In our view, the market's 27-month upward move is a cyclical bull market within a secular bear market, and it is now giving definitive signs of running out of steam. Although an oversold rally is still possible, we believe the market is extremely risky at this time.
The Big Picture: Risk is on the Rise
Comments