The stock market is on the brink of a major correction, according to Michael Gayed, a bearish fund manager who has been sounding the alarm for months. In a recent op-ed, Gayed pointed to three warning signs in the market that suggest a steep decline could be on the horizon.
Gayed highlighted the rising prices of gold, utility stocks, and long-term Treasury bonds as indicators that investors are seeking safety in traditionally defensive assets. This unusual movement in these asset classes, particularly during a period of speculative trading, is a red flag for Gayed.
The portfolio manager has been vocal about his concerns regarding a potential bubble in the stock market, echoing the sentiments of other Wall Street bears. He warned investors to prepare for a possible stock market crash, though he did not provide a specific price target.
Despite these warnings, investors seem to be largely optimistic about the market, with over 50% feeling bullish on stocks in the next six months. This sentiment is reflected in surveys conducted by the AAII and the Yale School of Management, which show that investors are the most upbeat about the market since 2007.
As the debate between bullish and bearish investors continues, the looming threat of a market correction remains a cause for concern. Gayed’s cautionary words serve as a reminder that all bubbles eventually burst, and investors should be prepared for the possibility of a significant downturn in the near future.
