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Robert Kiyosaki, the American author known for his popular books on personal finance, has taken on social media X to warn his millions of followers about the “everything bubble” in American stocks, bonds and real estate. The financial commentator predicts that this bubble is “on the verge of collapse.”
Kiyosaki recommended that his followers protect themselves against this possible crash by purchasing precious metals (gold and silver) as well as Bitcoin, the largest cryptocurrency in terms of market capitalization.
Is there a stock market bubble?
Although many investors worry about a potential stock market bubble, historical data shows that their concerns are not based in reality. Like Reuters points out, the only real post-World War II stock market bubble burst in the early 2000s, during the Internet boom. Various companies reached ridiculous valuations during the dot-com bubble phase, and this mania eventually turned into a serious bear market.
However, the business outlet also noted that corporate balance sheets are currently in good shape, indicating that persistent warnings about the “everything bubble” might simply be alarmist.
That being said, Albert Edwards of SocGen recently of opinion that various stocks could indeed be showing telltale signs of a stock market bubble. He further argued that the artificial intelligence craze could get out of control.
Portfolio diversifier
In 2022, Bitcoin's price plunged along with U.S. stocks as the Federal Reserve rushed to raise interest rates to control runaway inflation. This has prompted many critics to question Bitcoin's diversification capabilities. That said, Bitcoin could be a more attractive means of portfolio diversification in 2024.
At the same time, Jurrien Timmer, director of global macroeconomics at Boston-based financial giant Fidelity Investments, recently highlighted the fact that Bitcoin now has a negative correlation with the benchmark S&P 500 index.