In the world of investment, there are always predictions of doom and gloom. Michael Cembalest, chair of market and investment strategy at JPMorgan Asset Management, is known for challenging these pessimistic forecasts. This time, he presents an updated chart that highlights notable predictions and the impact of shifting funds between the S&P 500 and the Barclays aggregate bond index.
Cembalest doesn’t just reference permabears like Albert Edwards and Peter Schiff, but also respected figures like George Soros during the height of the COVID pandemic. However, even he recognizes that the stock market may currently be overvalued.
While acknowledging the bullish sentiment among investors and the high levels of leverage in the markets, Cembalest warns that a correction may occur later this year. He cautions against Armageddonists who will seize upon this point to claim that things will only worsen.
The S&P 500 reached a new record high on Thursday, closing at 4,997.91. However, it couldn’t sustain its intraday peak above 5,000. On the other hand, the iShares Core U.S. Aggregate Bond ETF has experienced a 1% decline over the past 52 weeks, whereas the SPDR S&P 500 ETF Trust has seen a 22% gain during the same period.