Wall Street Is Worried About A Bubble – Here's How To Cash In

The Dow's above 33,500, the S&P 500 is above 4,100, and the Nasdaq is north of 13,800 (QQQ).

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No wonder I've been hearing the "B-word" so much lately.

Just about everyone is talking "bubble" – every once in a while, almost on schedule, the financial media fixates on valuations, like how the Apple Inc. (AAPL) shares that were a great buy at $128.50 are suddenly a ticking time bomb at $130.10.

I'll tell you up front: I'm not worried about a bubble yet.

That said, I don't think it's out of the question; we could certainly see a correction, and a snowball effect that could make it a tough one.

And with that said, I'm still not all that worried. You shouldn't be, either – once you realize what's actually happening and how easy it is to make money right now…

Wall Street Is Still Underestimating Retail Investors

For decades, the stock market was thought of as a rich man's game. And like they say, if it looks like a duck… As recently as 2017, the top 10% of the richest Americans controlled more than 84% of the total value of stocks, bonds, and other securities.

But the rise of online trading platforms and mobile, commission-free trading as well as the COVID-19 pandemic really kicked that trend into high gear. Millions of people lost their jobs, but tens of millions of people, suddenly stuck at home with little to do, with few outlets for excess cash, and – interestingly – no professional sports to bet on, started playing the markets.

More than that, a bunch of these new folks learned how to trade options, generating insane levels of volume and liquidity.

These investors were a big reason the market hit all-time highs in the middle of a deadly public health crisis that crippled the economy.

Were these folks inexperienced? Sure, that's probably fair. Were they aggressive? Definitely. Wall Street completely underestimated their ability to generate big volume, as we saw with GameStop Corp. (GME) back in January. A bunch of hedge funds learned a very expensive lesson then.

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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