金融市场

Sensible investors need to hold more cash as rewards for owning stocks diminish

Three years ago it sometimes felt that one of the most wildly contrarian opinions one could hold about the stock market was that it wasn’t staggeringly overvalued and primed for a crash.

Voices as varied as Donald Trump and the Yale University market scholar Robert Shiller warned of bubbles inflating in financial markets, with the latter observing how “it looks to me a bit like a bubble again”, and how “many people are re-evaluating their exposure to the stock market”.

Since then, with hindsight, they both were wrong, or — if one wishes to be charitable — simply too early. The US S&P 500 index has risen 34 per cent from the start of 2015 and after entering the White House Mr Trump took to tweeting about rising stock prices as if they were a barometer of his political success, rather than a warning of growing overexuberance.

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