The bull market will continue in 2021 with stock holdings still well below dangerous Global Financial Crisis levels, JPMorgan says

• 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.
• At the moment, non-bank investors around the globe allocate 43.8% of their portfolios to equities, which is significantly lower than the post-financial crisis high of 47.6% which was seen in January 2018, JPMorgan said.
• This means stock can continue to grow higher, said the strategists.
• Sign up here our daily newsletter, 10 Things Before the Opening Bell.

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.

This means stocks can continue to go higher, said the strategists.

Read more:Julian Klymochko wakes up at 4:30 a.m. to manage an ETF that seeks to profit from the SPAC boom. The investing chief breaks down how the strategy works, and shares 2 new SPACs on his radar

Shape Up Your Future 16th & 17th September 2021

• 15+ Knowledge Sessions
• 30+ Industry leaders

Watch Live

Meet Our Speakers

Nikhil Malhotra

Dan Schawbel

Ronnie Screwvala

Dr. KV Subramanian

Benjamin Pring

Sanjeev Bikhchandani

Watch Live

The 42.3% allocation, what JPMorgan considers "neutral equity allocation" was first breached in the middle of November. Stocks exceeded analyst expectations amid positive vaccine news and the conclusion of the US presidential election. At the same time, the government bond market faced a selloff, which pushed equity allocations further above neutral.

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.