From Yahoo Finance: 2025-05-24 12:55:00

Bill Smead advises against investing in the S&P 500 due to momentum driving the rally. His fund has underperformed, down 11% in the last 12 months while the S&P 500 rose 10%. Smead warns of overvaluation and unsustainable growth, urging caution in the current market climate.

Smead’s concerns are supported by data showing that high valuations historically lead to low returns. The momentum factor, with the S&P 500 rising 23% in 2024 while momentum surged 58%, indicates market exuberance outpacing earnings growth. Experts warn of a potential market correction fueled by unsustainable momentum and high valuations.

Interactive Brokers’ chief strategist notes a powerful momentum surge since Trump’s tariffs were paused. Smead warns that the market has been momentum-driven since the Great Recession, leading to potential risks. He labels this market as the most dangerous in his 45-year career, surpassing previous crash scenarios and signaling caution for investors.



Read more at Yahoo Finance: ‘This is maybe the most dangerous market of my career’