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Are we in a stock, bond, and real estate bubble today?

Updated: Mar 23, 2022

RL108 – Are we in a stock, bond, and real estate bubble today?

Today on the Retirement Lifestyle Show, Roshan Loungani, Erik Olson, and Adrian Nicholson dissect Jeremy Grantham's publication on the US Super Bubble Extravaganza. They discuss the similarities between previous market crashes and the current market environment, the economics of the Fed Put, and what a super bubble burst would do to your retirement plans.

[01:44] Are We in a Super Bubble?

[08:20] Stats That Define Super Bubbles in Various Asset Classes

[13:30] Trends, Regressions, and Stock Market Corrections

[23:05] How a Super Bubble Could Affect Your Retirement Plans

[25:40] Tell-tale Signs of a Late-Stage Bubble

[30:07] The Stock Market Vampire

[35:30] How Long Until the Fed Stops Protecting the Markets?

[38:04] Stimulus Packages and How They Impact the Super Bubble

[39:40] The Economics of the Fed Put

[46:55] Actions from Institutional Investors in a Low-Interest Rate Environment

[49:30] Factors That Might Lead to a Super Bubble Burst

[55:50] The Dos and Don'ts When Tackling the Super Bubble

[01:01:40] Parting Thoughts

For more links and the full show notes keep scrolling down!

Roshan Loungani can be reached at or at 202-536-4468.

Erik Olson can be reached at or 815-940-4652.

Adrian Nicholson can be reached at or at 703-915-8905.

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Full Show Notes:

Are We in a Super Bubble?

According to Jeremy Grantham from GMO, 2022 might be the year the bubble constantly talked about since mid-2020 finally pops. He believes that 2021 was defined by a standard bubble that only resulted in a somewhat routine pain for the economy. However, the consistent rise in the market and no signs of the bubble ever bursting means that now the bubble has advanced to the category of superbubble. So, what is a super bubble? Simply put, a super bubble is an extreme bubble ready to burst. According to Grantham, the effects of a super bubble burst would be more epic than the dot-com bubble crash in 2000, the 1989 Japanese stock and housing markets crash, or the US housing-led crash in 2007. So, the question now is, are we truly in a super bubble? And if we are, what can you as an investor do to cushion your portfolio or take advantage of the opportunities that may arise if the bubble were to burst.

The Stock Market Vampire

In his January 2022 publication, Jeremy Grantham describes the current stock market as being in the vampire phase. Just like a vampire, nothing seems to kill the ever-rising trend in the stock market. For example, the end of QE and the promise of higher rates was not that much of a big deal to the stock market. COVID came, scared the spirits out of everyone, and still the "vampire" lives on. If Covid couldn't halt the stock market rise, most people assumed nothing will; it's completely immortal. However, Jeremy Grantham now believes that the vampire is about to die due to a number of reasons, such as speculative investor frenzy and inflation. He believes that the long-phased bull market is now coming to an end, that the super bubble will eventually burst, and investors should take caution when investing in the days to come.

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All opinions expressed by podcast hosts and guests are solely their own. While based on information that they believe is reliable, neither Arete Wealth nor its affiliates warrant its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only, and should not be regarded as specific advice or recommendations for any individual. Before making any decisions, consult a professional.

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