Conservatively speaking, there’s about a 100% chance the market is in the middle of a moderate and possibly major stock market bubble.
How do I know this?
Well, as someone who’s lived— and reported—through several bubbles, including the mother of all, which preceded the 2008 banking collapse, I recognize the telltale signs, all of which exist at this very moment: extremely low interest rates (which we’ve had in spades in recent years); a slow-growth economy (which means stocks are trading above levels where they should, given corporate earnings; and the fact that the Federal Reserve knows it has to raise them at some point or they’ll create another housing bubble like the one that led to the 2008 crash.
So does that mean it’s time to start unloading? Not by a long shot. There’s a simple rule of thumb for investors: Never pick a market bottom or top. If you’ve been in the market for a while, you’ve had a nice run. There’s no reason to bail now, even if you lose a few bucks when the correction comes—as it will when the Fed starts to raise interest rates.
My advice? Hold tight and wait for the next major rate raise. When that day comes—and it will—then start thinking about selling stocks and find some safe muni bonds to park your money in.
Until then, enjoy the ride up, because there’s going to be nothing fun about the stock market when this thing begins to tank.
Charles Gasparino is a Senior Correspondent at Fox Business Network and a columnist for Men's Fitness. Follow him on Twitter.