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Stocks have been flat over the last month, but pockets of speculation endure.
In a recent piece, Lance Roberts argued that stocks are in a bubble that will eventually burst.
He shared five indicators that show stocks over-extension.
Stocks have effectively gone sideways over the last month, with the S&P 500 down just 0.4% since April 21.
But that s unlikely to be the continued fate of stocks as the economic rebound that investors have been anticipating begins to play out, according to Lance Roberts, the chief investment strategist at RIA Advisors, a financial-planning firm with over $800 million under management.
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As stock indexes sit near record highs, Wall Street s biggest banks say future returns look dim.
Goldman Sachs, Morgan Stanley, and BofA strategists aren t bullish on the S&P 500 in the near term.
They share nine areas of the markets where investors can find the best opportunities.
Stocks continue to reach new highs as the economy begins to reopen with more than 40% of the US population vaccinated against COVID-19.
But investors shouldn t expect to continue seeing the returns they have over the past year, some of the biggest investment banks on Wall Street say.
How Stock Bubbles Die
The mega trends in the next decade are increased wages for workers and declines in corporate profit margins. The political tailwinds are in place. There is high income inequality; the large cap companies are earning extremely high profit margins. Politicians have these large cap firms squarely in their crosshairs. One proposal that supports this point is the global minimum tax.
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Aligned with this trend is universal basic income which might be experimented with beyond the recent COVID-19 stimulus checks. We also could see an increase in union membership. Amazon employees have been attempting to unionize, but Amazon has thwarted some of these efforts. As you can see from the chart below, there has been a minor uptick in unionization in the past few quarters. This follows a very long period of declines since the 1970s.