The Dow Jones Industrial Average surpassed 17,000 for the first time in its history last week. The S&P 500 is at an all time high as well. Only the Nasdaq hasn’t surpassed its tech-bubble peak. And its not just the stock market—real estate, high-yield bonds, emerging markets, government debt, fine art—you name an asset and I promise you it’s booming. The latest craze is frontier debt. That is, bonds of dicey governments such as those in sub-Saharan Africa. Credit spreads—the differential in borrowing costs faced by investment-grade and lower-rated firms—are at an all-time low. Overall market volatility has almost never been lower. It looks like the good times are here. Except, they most decidedly are not.
A Fool's Game
A Fool's Game
A Fool's Game
The Dow Jones Industrial Average surpassed 17,000 for the first time in its history last week. The S&P 500 is at an all time high as well. Only the Nasdaq hasn’t surpassed its tech-bubble peak. And its not just the stock market—real estate, high-yield bonds, emerging markets, government debt, fine art—you name an asset and I promise you it’s booming. The latest craze is frontier debt. That is, bonds of dicey governments such as those in sub-Saharan Africa. Credit spreads—the differential in borrowing costs faced by investment-grade and lower-rated firms—are at an all-time low. Overall market volatility has almost never been lower. It looks like the good times are here. Except, they most decidedly are not.