Rule of thumb: the more expensive a return is, the lower its prospective return. That’s simple. But sentiment and markets can become and stay irrational longer than investors can stay solvant, they say. So if you can not predict when the markets will turn, it’s probably better to check where the risks are and monitor them the best you can.
According to Investopedia a « melt-up » is a « A dramatic and unexpected improvement in the investment performance of an asset class driven partly by a stampede of investors who don’t want to miss out on its rise rather than by fundamental improvements in the economy. »
This is exactly what could happen to financial markets, according to veteran value investor Jeremy Grantham. Continuer la lecture de « Are We on The Verge of Final Melt-Up Before the Next Krach ? Jeremy Grantham Thinks So »