Stock markets are too high and set to fall?

aroominyork

Pork bellies to the rescue!

Lots of us wish we'd bought commodities or gold during recent years. Is there an asset class which is useful in balanced portfolios and currently underpriced? Long dated gilts?

boingy

Reckless is how I would describe her comments. We all know a correction will happen at some point but someone so senior to saying it out loud could well cause that correction. Markets are fuelled by confidence, a fragile commodity at the best of times.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81977440#Comment_81977440

The right hand side has already been covered up to a certain extent, as the chart omits the last ten years!

vacheron

https://forums.moneysavingexpert.com/discussion/comment/81978098#Comment_81978098

I know. It was late and I was on my phone! 😁

I have posted a logarithmic chart on this forum before which included far more recent years, but I didn't have time to trawl for it. If I can find it I can I'll repost it below. 👍️

edit: there we go…. If anything the last 10 years reinforces the point even further.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81976544#Comment_81976544

I dont think its ever been immune but it seems to remain less common than other countries.

[Deleted User]

https://forums.moneysavingexpert.com/discussion/comment/81976552#Comment_81976552

One theory is that there is a transfer of wealth underway from boomer estates to their heirs, who need somewhere to park the funds and there are precious few options available. Pension funds and property investments have been encashed. Many of those heirs don't want to work, instead they want to live off passive income. Two of my neices and one nephew are now in this situation, all are leading a life of leisure, travelling to all points of the compass.

dunstonh

One theory is that there is a transfer of wealth underway from boomer estates to their heirs, who need somewhere to park the funds and there are precious few options available.

That is not likely to affect global stock markets. The UK is in a minnow and redistribution of wealth within the UK would not steer global markets.

[Deleted User]

https://forums.moneysavingexpert.com/discussion/comment/81984886#Comment_81984886

I wasn't refering to just the UK, the reference is to markets globally, especially the US. The UK market may be a minow but it is driven to a significant degree by the US market. The wealth transfer in the US is massive and those heirs face the same issues regarding where to park legacy funds, ditto Far Eastern, Asian and European heirs. This is a global issue that has a residual benefit on the UK market.

https://www.ml.com/articles/great-wealth-transfer-impact.html

[Deleted User]

https://forums.moneysavingexpert.com/discussion/comment/81984983#Comment_81984983

The AI summary of the markets impact of wealth transfer is worth reading, if you need help in understanding why many markets globally remain high, particularly the US:

A historic, multi-decade transfer of over $80 trillion in wealth is currently shifting from baby boomers to younger generations, which is acting as a major, yet complex, tailwind for global investment market buoyancy. Despite geopolitical risks, this transfer is fueling demand for new asset classes while reinforcing demand for established ones, with global high-net-worth individual (HNWI) wealth returning to record levels.

• Massive Capital Shift: More than $83 trillion is expected to be transferred over the next 20–25 years, with $74 trillion moving between generations and $9 trillion horizontally between spouses.
• Geographical Concentration: The US dominates this trend with over $29 trillion in transfers, followed by Brazil and mainland China.
• Record Buoyancy: Despite economic shifts, global wealth grew 4.6% in 2024, with Assets Under Management (AUM) reaching a record $135 trillion, driven heavily by strong, resilient equity markets.
• Rise of the "EMILLI": The rise of "Everyday Millionaires" (EMILLIs)—those with $1–$5 million in investable assets—is fueling market participation, as this group holds roughly $107 trillion.

[Deleted User]

Another interesting tidbit that I didn't know, one that begins to account somewhat for the continued rise in US markets at least and probably in others also:

"The vast majority of the stock market is owned by just a small chunk of Americans: the top 10% income percentile in the US owns 87.2% of the market. The bottom 50% own just 1.1% of all stocks.

Continued spending from the top has kept many companies afloat as other consumers cut spending"

.https://www.theguardian.com/business/ng-interactive/2026/may/14/us-stock-market-war-inflation-tariffs-trump