The past year has seen some spectacular performances in a concentrated number of equity sectors and some alternative asset classes.
US tech and Bitcoin are two noteworthy examples, and more recently we have seen a spectacular rise in heavily shorted US stocks and also the price of silver (the second surge in 12 months).
Bubbly price moves are raising concerns that many markets are becoming detached from reality and vulnerable to a major reality check. Indeed some commentators have gone as far as to label the entire US equity market as being in extreme bubble territory.
Just how big and how widespread are valuation excesses and how vulnerable are risk assets to a significant unwind? Moreover, why are we seeing a run of parabolic moves in certain asset classes?
We look at the ingredients in the mix for potential asset bubbles, exploring the general strength of equities and some of the explosive moves in other areas of the financial markets, including:
Disclaimer and disclosures
Recommendation structure, definitions and the Financial Services Guide (“FSG”) can be found at www.wilsonsadvisory.com.au/disclosures.
This document has been prepared by Wilsons Advisory and Stockbroking Limited (AFSL 238375, ABN 68 010 529 665) (“Wilsons”) and its authors without consultation with any third parties, nor is Wilsons authorised to provide any information or make any representation or warranty on behalf of such parties. Any opinions contained in this document are subject to change and do not necessarily reflect the views of Wilsons. This document has not been prepared or reviewed by Wilsons' Research Department and does not constitute investment research. Wilsons makes no representation or warranty, express or implied, as to the accuracy or completeness of the information and opinions contained therein, and no reliance should be placed on this document in making any investment decision. Any projections contained in this communication are estimates only. Such projections are subject to market influences and contingent upon matters outside the control of Wilsons and therefore may not be realised in the future. Past performance is not an indication of future performance.
In preparing the information in this document Wilsons did not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Any advice contained in this document is general advice only. Before making any investment decision, you should consider your own investment needs and objectives and should seek financial advice. You should consider the Product Disclosure Statement or prospectus in deciding whether to acquire a product. The Product Disclosure Statement or Prospectus is available through your financial adviser.
Wilsons and Wilsons Corporate Finance Limited (ABN 65 057 547 323, AFSL 238 383) and their associates may have received and may continue to receive fees from any company or companies referred to in this document (the “Companies”) in relation to corporate advisory, underwriting or other professional investment services. The directors of Wilsons advise that at the date of this report they and their associates may have relevant interests in the securities of the Companies. Please see relevant Wilsons disclosures at www.wilsonsadvisory.com.au/disclosures.
David is one of Australia’s leading investment strategists.