Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.
Regardless of the global pandemic, and the related economic uncertainties, equity markets have been skyrocketing. Elon Musk has become the world’s richest person as Tesla (NASAQ: TSLA) nears a $1 trillion dollar market cap, Robinhood traders are ruling the markets, SPACs have made a resurgence, real-estate markets are climbing, practically all commodities are trending higher, and Bitcoin is absolutely flying. With both large-caps and small-caps trending higher, global equity markets are hitting new highs, in a rip-your-face-off rally.
It’s clear equities are red-hot. And, over the past year smaller stocks – microcaps, have been one of the best returning segments of the equity markets as we predicted in early 2020, with the TSX-Venture up 50% in 2020 and the Canadian Securities Exchange (CSE) up a staggering 70%.
Many investors have commented that the current market reminds them of the market of the late 1990s, before the dot-com bubble burst.
It begs the question – are we in a bubble?