Smart money tricks: How to invest in US stocks without losing your shirt
US market shows signs similar to late-90s tech bubble while dominating global shares. Investment experts suggest two clever ways to stay in the game while managing high-valuation risks
On this years Thanksgiving american investors face a tricky choice - how to benefit from market growth while avoiding over-valued stocks (which look similar to the tech-bubble times)
The numbers tell an interesting story: US stocks make-up 60% of world markets but its economy is just 26% of global GDP. Neil Woodford points out in his blog that price-to-earnings ratio stands at 22.5% - way above other markets; plus book-value metrics are near late-90s levels
US stocks keep climbing due to several factors: double-digit company earnings growth tax-cuts and strong economic data. Meanwhile Europe stays flat and China cant reach its 5% GDP target. The situation creates a classic fear-of-missing-out problem for smart-money managers
Two low-risk ways exist to join the party: First the Russell 2000 small-caps index (which just broke its 3-year-old record) looks promising. While $100 in this index stayed flat since covid times; the same money in big-tech heavy S&P 500 turned into $130
The second approach involves picking value-focused stocks or dividend-paying companies; this helps avoid over-priced mega-caps. A well-balanced portfolio should include US exposure - its still worlds most dynamic market but smart investors will look for less risky entry points
