Market Bubble Brewing? Expert Warns Perfect Setup for Investor Panic and Steep Stock Correction
• The stock market has the "perfect setup" for investor panic and a steep correction, warns portfolio manager Michael Gayed. He points to rising prices of defensive assets like gold, utilities, and bonds.
• Gayed has warned for months that stocks are in a massive bubble, in line with other bears who cite overhype around AI. Stocks now look like pre-crash 1999 and 2007, per top economist Rosenberg.
• Gayed warns investors to brace for a potential stock market crash, though without an official target. He says "all bubbles end" and thinks "we're all in a lot of trouble."
• Despite crash warnings, over 50% of investors feel bullish on 6-month stocks, per AAII survey. Over 81% believe the Dow will end 2022 higher - the most optimism since 2007.
• Risk seems lost on optimistic investors anticipating soft landings and Fed rate cuts later this year. But crashes can still happen despite prevailing bullishness.