Bubble warning: Five indicators to watch out for
By Chang Lin Zhu, 11 Aug 16
As the old strategy of “sell in May” has proved a failure thus far in 2016, Russ Mould, investment director at AJ Bell, looks at five indicators investors can use to judge whether there are further gains to be made or whether markets are entering bubble territory.
“For the moment the narrative that is dominating sentiment is that of further monetary stimulus (lower interest rates and more QE) from central banks and a swing in governments’ fiscal policy from austerity to stimulus.
This means that trying to take a strong view on how markets develop is trickier than ever. However, there are some key indicators that can be used to judge whether markets are rightly bouncy, or becoming dangerously bubbly to the point of bursting,” Mould said.
Tags: Investment Strategy