Millionaires Are Investing Like A Market Bubble Is Here

Guest Post From Birch Gold Group

Millionaires Are Investing Like a Market Bubble Is Here

Wealthy investors like Warren Buffett have issued disclosures in the past that ended up signaling major market shifts ahead of time.

Other wealthy investors have warned about macro-trends in the U.S. economy, and still others have warned about specific trends that could have an impact on investors. According to a recent E-Trade survey, 91% of investors with portfolios of at least $1 million think the market is approaching or at least somewhat in a bubble.

As alarming as that insight alone may be, what seems more alarming is how potentially detached from reality the stock market’s reaction to that news is. Just take a look at the upward trend of the Dow Jones Industrial Average:

Dow Jones index late October 2020 - late January 2021

“There is a broader recognition of an economy that is improving and signs that the factors are in place for the market to move higher,” said Mike Loewengart, chief investment officer at E-Trade Financial’s capital management unit.

For example, on Tuesday the markets rallied almost solely on news surrounding Biden’s inauguration, according to a CNBC article:

The stock market rallied to a record close as President Joe Biden was sworn into office, sparking hopes for another stimulus package and smoother vaccine rollout ahead.

Of course, this is only one example of how the market specifically moves and seems detached from the reality of a potentially inflated bubble, as 91% of the investors in the survey think:

16% believe we’re “fully in a bubble”
46% call it “somewhat of a bubble”
29% believe the market is approaching a bubble

Despite this, the same survey reveals 64% percent of millionaires are bullish (up 9% from Q4 2020), even more than the mere 57% of the broader investor universe that remains bullish.

You might be thinking that if someone who is wealthy catches wind about a market bubble, they wouldn’t be so bullish. But that doesn’t appear to be the case…

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