The big question swimming around every market punditâ??s head right now is whether we are in an equity market bubble, and whether that bubble is going to burst and send stocks collapsing the way they did in 2008-2009, in 2000 and in 1987.
From high-profile bond fund managers to doom-and-gloom prophets to Nobel Prize winners, the banter is all about bubbles. Now, I can certainly understand this fascination, as the bursting of a market bubble can be extremely hazardous to your wealth, especially if you insist on investing the way the Wall Street marketing machine wants you to, and that is to buy-and-hold and sweat it out through any market action.
I think the question of bubbles is logical given the fact that the S&P 500 has vaulted some 26% year to date. In fact, the broad measure of the domestic market is on pace to have its best year since 2003. When things get this bullish, we all start to worry about how long the good times will last.