The stock market is at risk of a melt-up. That’s according to Larry Fink, chief executive of the world’s largest asset manager, BlackRock. He discusses the situation with CNBC. Investors should take forecasts with a grain of salt, though, says Vitaliy Katsenelson of Investment Management Associates. He explains why it’s good advice to turn off business TV. If you’re weighing stocks vs bonds this year, there’s new data to support both. Liz Ann Sonders, Jeffrey Kleintop and Brad Sorensen of Charles Schwab summarize the numbers.
Stock Market At Risk Of A Melt-Up, Not A Meltdown — BlackRock’s Chief Executive Larry Fink says that with stocks knocking on the door of records, a surge to the upside appears more likely than a market collapse. A meltup is often defined as a sharp and unexpected rise in the price of an asset class, driven largely by a stampede of investors who are more concerned about missing out on a big up move than by improving market fundamentals. Melt-ups are often followed by sharp market setbacks. Read more…
Why Investors Shouldn’t Watch Business TV — Investors are prone to two opposing but equally debilitating fears: the fear of missing out when times are good, and the fear of loss when markets are volatile. These two fears have a zero-sum relationship with rational decisions. The more you are dominated by these fears, the less rational you are. Thus, reacting to shifts in the market isn’t a sound investment strategy, as Vitaliy Katsenelson explains. Read more…
Stocks vs. Bonds…Who’s Right? — Mixed economic data continues into the second quarter, and earnings season has just begun. Those who prefer stocks or bonds can point to data supporting each. The numbers, however, suggest that investors should focus on the tried-and-true disciplines of patience, diversification and periodic rebalancing, while keeping an eye on long-term goals. Read more…
John R. Day, Bill Ennis, Stephanie Hall, and Matt Heller
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