What’s worrying advisors as bull market rolls on
The S&P 500 recently eclipsed the 5,300 mark, cracking the index’s all-time high. Clients are ecstatic upon opening their monthly statements. And, perhaps best of all, the kids will soon be headed off to summer camp making remote work even more of a joy.
Yes, it’s a wonderful time to be a financial advisor!
That is, of course, unless something goes horribly wrong, sending stocks southbound again.
So if there was one thing that could turn all those bullish smiles into bearish frowns, what might it be?
Michael Leverty, CEO and founder of Leverty Financial Group, says his biggest concern in the face of this seemingly unstoppable bull run is the potential for overvaluation.
“Many stocks are trading at high multiples relative to their historical averages, which can be a sign of excessive optimism,” said Leverty. “While US large-cap stocks, particularly in the tech sector, are often perceived as overvalued due to high price-to-earnings ratios and significant market run-ups, other market sectors and asset classes can offer more reasonable valuations.”
To protect his clients from a market turnaround should one arise, Leverty says the key is to remain focused on long-term goals and maintain a disciplined approach, recognizing that market timing is unpredictable and often leads to suboptimal investment decisions.
“Staying invested across multiple asset classes allows us to capture growth where it occurs and reduce the impact of volatility in any single segment of the market,” said Leverty.
Meanwhile, Danielle Darling, an LPL Financial Advisor with Resource One Advisors, remains optimistic that the bull market will keep charging ahead, primarily due to cooling inflation. If she were to pinpoint one thing that might ultimately
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