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Six of the seven conditions for a speculative bubble in the United States of America have been met (traders.lt)

Įvykdytos šešios iš septynių spekuliacinio burbulo JAV sąlygų (traders.lt)

UBS strategist Andrew Garthwaite thinks that the U.S. stock price market is not in the speculative bubble yet is ploughed , reports MarketWatch.

He created a list of bubble conditions based on these, which happened during those periods in the United States in the late 1990 sand in the previous Japanese share markets in the 90s.

The conditions for the creation of the bubble which he believed had already been fulfilled – the structural end of bulls in the market, when actions offered better returns than bonds, the decreasing improvement of companies performance,the narrowing of the number of companies participating in the market growth , the 25 years since the last bubble and the strengthened opinion, that “this time is different”, so even the increased involvement of individual investors in the speculation.

The only condition that has not been fulfilled so far is a loose central bank monetary policy , notes Andrew Garthwaite.

UBS strategist believes that the period should be moved when the America’s ten decade long period of country bond yields peakedatfivepercent.Itadvisesinvestorstoreducetheweightofnon-financialcyclicalcompaniesintheirportfolio,preferring”defensive”companieswithlowvalue.Garthwaitebelievesthatfinancialactionsaregoodprotectionagainstpopulism,becausetheyareoftenthemostmarketedasinflationgrows.

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