U.S. stock market ETF inflows have hit $150 billion – a level reached only once before in 2021.
This surge coincides with the S&P 500’s remarkable 26% advance in 2024.
Simultaneously, the market’s PE ratio has climbed to heights seen only 2 times before – in 2021 and the late 1990s.
Currently, it’s sitting in the 90th percentile of the last 40 years.
These valuations have prompted widespread concerns about “irrational exuberance” from analysts, news outlets, and market experts.
Yet those who called the market overvalued in February 2024 watched it climb another 18%.
This is similar to December 1996, when then-Fed Chair Alan Greenspan warned of irrational exuberance after the market had risen 60% over 2 years.
After his famous speech, the market 2x over the next 3.5 years, proving that markets can stay irrational longer than investors can stay solvent.
Since “The Big Short” was released, many have tried to emulate Michael Burry by betting against the market.
Meanwhile, the S&P 500 has continued its steady climb higher.
Historical Parallels
Today’s market forces mirror the late 1990s boom in remarkable ways.
Economic growth hovers around 3% – exactly where it sat during that incredible bull run.
This growth rate has consistently led to substantial market gains throughout history, and current conditions suggest this pattern could continue.
That’s why the biggest risk to today’s market isn’t valuations, it’s a potential recession.
A slowdown in economic growth would likely bring a significant decline, which is why we’re closely watching the job market.
Ready to Profit From This Market?
At Bravos Research, we’ve navigated these markets with remarkable success in 2024:
- 104 total trades completed
- 68 winning positions
- 36 losing trades, with controlled risk
- Diverse portfolio spanning multiple markets
We recently booked a 52% profit on our $NTRA position.
Don’t Miss Our 40% Cyber Monday Offer!
Click here for access to our complete trading strategy
The Recession Watch
Initial jobless claims provide a weekly pulse on economic health.
Currently, claims have been moving sideways over the past year, showing no imminent recession signals.
When we put with the yield curve on top, jobless claims show an almost perfect correlation throughout history.
While inverted yield curves typically precede rising claims, current patterns match previous stable economic periods when markets trended higher.
So for now, although there are signs of a recession, economic growth seems to be relatively stable.
Inflation and Fed Policy
There is a second big similarity between today and the late 1990s.
That is linked to what the Fed is doing.
Since mid-2023, the Fed has kept rates stable, even cutting them slightly.
This consistency is fueling investor optimism as long as growth remains steady.
That’s exactly what happened in the 1990s.
In the 1990s, falling inflation allowed the Fed to maintain rate stability.
The Core CPI—a preferred inflation gauge—declined steadily during that period, creating a favorable environment for stocks.
Today, core inflation has also fallen sharply over the past couple of years, enabling the Fed to follow a similar playbook.
Now, as you can see, there’s been a slight tick up in inflation recently.
This is already getting a lot of people very concerned about the possibility of the Fed needing to raise rates again, which could end the bull market.
However, history shows that temporary increases didn’t derail the broader downtrend in the 1990s.
Our research continues to suggest inflation will head lower, supporting the case for continued market strength.
Our Current Strategy
Our portfolio maintains broad diversification across multiple markets and sectors:
- Cryptocurrency positions showing strong performance
- Turkish stocks delivering positive returns
- Malaysian and Chinese stocks offering potential buying opportunities
- U.S. utility stocks combining reasonable valuations with strong technical indicators
Recent data from institutional money managers shows increased leverage, suggesting potential short-term volatility.
While we’re not predicting an outright correction, we’ve rebalanced our portfolio accordingly.
At Bravos Research, we’ve made some incredible trades throughout this bull market:
- Average profit in 2024 = 16.61%
- Average loss in 2024 = 3.52%
We send buy and sell alerts on individual stocks, ETFs, crypto, and commodities.
Don’t miss our Cyber Monday 40% discount – a rare opportunity to access our complete trading strategy and real-time trade alerts!
Get access to real-time Trade Alerts here
Subscribe to our YouTube for more in-depth analysis and Follow us on X for real-time market updates!
Read more: Brace Yourself
