Greed, Speculation and Margin Debt: All Signs Point To A Stock Market Bubble

How we got here and what you can do to protect your money now

While we’re hopefully reaching the end of the global pandemic and the economy is beginning to get back on its feet, the record highs of the stock market can’t be fully explained by hopes of a swift recovery and a relatively frictionless return to normal alone. A full economic recovery has already been priced into the stock market since the initial market rally in the spring of 2020. Consequently, the driving forces behind these new all-time highs warrant a closer examination.

The underlying fundamentals of most securities have not changed. Further, the economy is still hurting considerably. Even with elevated consumer spending in Q4 of 2020, actual US GDP growth came in lower than expected. At the same time, the joblessness rate remains staggering. According to the Economic Policy Institute, the earliest unemployment claims of 2021 are still higher than they were at the height of the Great Recession. Although a multitrillion dollar stimulus plan is in the works, the stock market should not be trading at such highs given the state of the economy.

Since mid 2020, several trends have taken hold in the stock market that have not only helped to drive prices to all-time highs, but they also potentially signal…