While no two events in life may ever be the exact same, some share traits similar, and market bubbles are one of those. It’s been just over a year since the last stock market crash.
It’s impossible to know for sure when another collapse is coming, but when one investment strategist correctly called the last two previous bubbles and is now warning of another- it’s time to listen.
Jeremy Grantham, co-founder and chief investment strategist at investment firm GMO, told Bloomberg News in a recent interview that investors have saturated the market with “meme stocks” and called it, “a totally nihilistic parody of actual investing.”
“This is it guys, the biggest U.S. fantasy trip of all time,” stated Grantham.
Cryptocurrencies like Dogecoin were created as a joke and despite that, millions of people are placing their bets on it for ‘fun’.
He is calling Bitcoin the asset that most resembles the Nasdaq during the 2000 dot-com bubble and doesn’t view it as a viable hedge to traditional stock and bond portfolios.
This is no joke. Grantham anticipated market downturns in 2000 and again in 2007 leading up to the 2008-09 financial crisis.
The signs of a bubble are everywhere.
“It’s particularly dangerous now because the bond, stock and real estate markets are all inflated together,” he stated.
One piece of evidence is clear. The Federal Reserve’s interest rates are at their lowest in history and they can’t be lowered any further. What course of action does that leave the Fed with when another crisis hits?
Although a large portion of Grantham’s focus was placed on the cryptocurrency market, he believes it’s a broader signal that the stock market as a whole is in danger.
The market historian sums up the last 12 months as a “classic finale to an 11-year bull market.”
History doesn’t always repeat itself, but when a market expert with a proven track record shares their knowledge and insight into such an important financial matter, taking a few notes may not be a bad idea.
Timing the market is complicated, and only a small amount of investors have pulled it off successfully. It was J.P. Morgan who once said, “Gold is money, everything else is credit.”
Perhaps now is the time for a better approach and to begin being proactive, not reactive.
Call American Hartford Gold today at 800-462-0071; we can help.
