Market Overview

Strategist: The Bull Run Is Over, Take Your Profits While You Can


The Dow Jones Industrial Average benefited from a triple-digit point surge on Tuesday while the S&P 500 index hit a new intra-day all-time high. Despite the market's continued momentum, some experts are calling for investors to lock in their profits and exit American stocks.

Every bull run has to come to an end at some point and Stephen Wood, the chief market strategist at Russell Investments, thinks that time has come after eight-plus years of a "strong rally." To support this claim, he noted during a recent CNBC "Trading Nation" segment that valuations are being "decreasingly supported by the fundamentals" in the U.S. market.

But this doesn't mean that stocks across the world will follow suit. Investors should consider moving American investments across the ocean and buy European, Asian and emerging market stocks. These regions aren't facing the same valuation problem that is now plaguing American stocks.

The European Central Bank will continue taking an accommodative stance as opposed to the Federal Reserve that's looking at "how and when to take away accommodation," he added. The Fed's upcoming actions will "take a little while for the market to digest," which implies the "the non-U.S. is the strongest call."

Finally, many investors may ignore the warning due to a "home-country" bias which is a "problem" that is seen in nearly every portfolio, Wood argued.

"We would say after eight-plus years of a strong rally, trim some of those profits and rebalance," he concluded.

Related Links:

Wide-Spanning Market Implications When Fed Changes Its Tone

20 Biggest Mid-Day Gainers For Tuesday


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Posted-In: Bull Run Central Banks CNBC Emerging MarketsFutures Federal Reserve Markets Media

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