There's more room to run in the current bull market based on current investor stock holdings, according to a team of JPMorgan strategists led by Nikolaos Panigirtzoglou.
As equity indexes continue to blaze past new highs, investors may be cautious that the stock market is headed for an inevitable crash. Last week, legendary investor Jeremy Grantham renewed his warning to investors that the stock market is in a "fully-fledged epic bubble," driven by extreme overvaluations and "hysterically speculative investor behavior."
At the moment, non-bank investors around the globe allocate 43.8% of their portfolios to equities, which is higher than the average 42.3% allocation post-Global Financial Crisis, but significantly lower than the high of 47.6% which was seen in January 2018, JPMorgan said.But because equity allocations are still well below the highest point, JPMorgan isn't worried that stocks are heating up too fast, too soon, and the bank sees further upside in the current bull market.
In order for the equity allocation to become a problem, the S&P 500 would have to gain 26.1%, the strategists said, a gain that is unlikely any time soon.Copyright © 2021. Times Internet Limited. All rights reserved.For reprint rights. Times Syndication Service.
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