How to make the most of an investment bubble

By Marcus Padley
Updated November 17 2017 - 9:48am, first published October 24 2017 - 4:53pm

You may have seen an article recently about the head of the Dutch central bank, Klaas Knot, who is also a governor on the European Central Bank, saying that "the picture resembles that of the period before the financial crisis", that we are "about to witness a brutal collapse in asset prices". He talked about overvaluation (the S&P 500 is hitting all-time highs), a low level of volatility (the VIX just hit a record low), and the risk that investment sentiment could turn very quickly if the US raises interest rates more aggressively than the market expects. He said the "risk of sharp market corrections is real".

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