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.
“None of these five signals look to be flashing danger, although Dr Copper is borderline amber, while the transport stocks, small caps, low market volatility and yield premium over bonds could all be interpreted as clear green lights.
All five could prove useful indicators as markets digest the economic and market fall-out of the Bank of England’s new monetary policy package and any further monetary or fiscal stimulus introduced in the European Union, Japan or elsewhere during the second half of this year and beyond,” he said.
Tags: Investment Strategy
