Richard Bernstein Advisors: Investors need to think outside the bubble

World of opportunity outside of bubble assets

I believe we face one of the biggest market bubbles seen in decades – one that is widespread, with the potential to impact long-duration bonds, high price-to-earnings stocks, bitcoin and the ‘innovative’ sectors the most.

The eventuality of a major bear market hinges mostly on liquidity, as well as a host of bubble characteristics portions of the market are currently displaying, including increased leverage, market democratisation, issuance and turnover. However, attractive returns are up for grabs outside of bubble assets.  In a bubble environment, investors become myopic. They believe the universe of attractive investment opportunities is small and growth can be found only in a few select sectors. It is exactly that narrow-mindedness that presents opportunities, as investors ignore the broad range of po...