Even the biggest, most perfectly formed financial bubble… bursts eventually. The pressure of outside forcesâ or a sudden, unexpected pin prick can wipe out years of impressive Stock profits in just a matter of days.
Bubble Bursting Event of Epic Proportions
The huge, unexpected, lingering, Covid 19 virus pandemic continues to dominate the world economy pressuring down corporate sales, profits… and eventually Stock prices.
As I update this in January, we are all reminded of how fragile the American economy is todayâvery much in the middle of a Covid 19 Pandemic. Nowhere is this more worrisome than in U.S. Stocks. Several is a Stock Market more vulnerable and carry more risk than when itâs near all-time highs after such a severe crash back in March.
Unbridled Enthusiasm… Again!
It was Federal Reserve Chairman Alan Greenspan that unleashed the phrase âunbridled enthusiasmâ back in 1996 commenting four years before the Stock Crash we now call the Dot Com Bust.
The Stock Market volatility in 2020 has been wild and crazy!
âGreed and fear of missing outâ VERSUS âsell and take your profits.â
Thereâs no better chart we’ve ever found than this one to understand if Stocks are a buy, they’re overvalued, or in a bubble.
Owning the S&P 500 right now is not the riskiest time in history. But the facts are clearâ Stocks are in an EXTREME BUBBLE. This chart from Longtermtrends.net communicates just how risky the U.S. Stock Markets are today.
Check the P/E ratio on Stocks you own. Keep a close eye on anything trading over 25 times earnings. Protect a portion of your long-term savings now.