The Stock Market Has Seen This Happen Only 2 Other Times in Over 150 Years, and History Has an Ominous Warning for Investors
The stock market is entering the fifth year of the current bull market, which started in October 2022. During these past four years, the S&P 500 has surged nearly 120%, fueled by the artificial intelligence (AI) boom.
However, the question on many investors’ minds is how much longer the good times can last. There are certainly signs the bull market could be losing steam. The breadth of market winners is actually quite narrow, with only a handful of stocks helping power the index. In fact, over a quarter of stocks in the S&P 500 (SNPINDEX: ^GSPC) are actually down 40% or more from their all-time highs, while nearly 60% of S&P 500 stocks are below their 200-day moving average.
Meanwhile, renowned investors like Michael Burry, who correctly called the housing bubble, and billionaire hedge fund manager Ray Dalio have been predicting that the AI bubble will burst. Burry has been very vocal, shorting several popular AI stocks, including Nvidia, Micron Technology, and Palantir Technologies, while comparing the current market to before the 2000 dot-com bubble. Dalio, meanwhile, has said the AI boom shows classic signs of a bubble ready to burst.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.