Bubble warning: Five indicators to watch out for
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.
“Market minnows are an excellent indicator of risk appetite – they tend to outperform when investors are bullish and fall faster than the broader market when they are bearish. The UK’s FTSE Small Cap and America’s Russell 2000 have both rallied hard from their lows but have yet to reach where they began the year. Bulls will want to see these benchmarks start to consistently tick higher and even set new highs for 2016 as a sign that confidence is truly blossoming,” he said.
Tags: Investment Strategy
