National AIM Warns of Equity Market Bubbles During 2018 and Advises Clients to Diversify Into Alternatives

National AIM insists equity market valuations are precariously close to triggering the start of a global financial crisis.

National Alternative Investment Management

National AIM, the New York and Hong Kong-based alternative investment management firm, has pointed towards a series of critical indicators that signal the potential for the collapse of an expanding equity market bubble during 2018.

Equity market valuation concerns continue to grow as the threat of rising interest rates looms, creating a realization that the flow of cheap money will inevitably dry up as central banks increase the costs of borrowing.

Markets have reacted over the last two weeks as the Dow Jones slumped to its worst fall in two years with both the FTSE and EURO STOXX 600 following suit, signaling a much overdue correction in the wake of 2017 that seemingly rewarded investors for their tenacity to ignore traditional analysis and market fundamentals.

The major economies are doing well, job data is promising, as is the global trade. However, one would be foolish to ignore equity market valuations and their effects on some of the world's leading corporations.

Geoffrey Blacklock

Head of Global Equities - National AIM

“Equity markets have continued to reward investors as economic stimulus practices injected since 2008 have taken on their desired effects. The major economies are doing well, job data is promising, as is the global trade. However, one would be foolish to ignore equity market valuations and their effects on some of the world’s leading corporations,” commented Geoffrey Blacklock, Head of Global Equities.

“One of America’s leading corporations bailed out of the 2008 financial crisis, valued today at $140 billion dollars, has almost $160 billion dollars of debt written into its accounts. Back in 2016, the same company lost $41 billion in cash whilst rewarding its CEO with $200 million dollars in bonuses. Using this one company of many as a stark example, it remains to be seen how the effects of mismanagement and manipulated accounting practices will play out as interest rates continue to increase.”

As a leading alternative investment manager, National AIM has indicated that a pattern emerged in the second half of 2017 signaling an increased flow of institutional capital away from equity and fixed income markets towards assets that are truly uncorrelated to the effects of stock market volatility.

“Sophisticated investors are aware that the nine-year bull run we have experienced will inevitably come to an end. Concerns that markets have had little in the way of a correction as valuations remain bloated, would suggest that a deep downturn will likely be painful for those who are heavily exposed.”

As value is becoming harder to come by, National AIM believes that retail investors and family offices are already beginning to diversify their positions with an increased allocation towards alternative assets such as private equity and real estate.

About National AIM

National AIM is a leading independent provider of wealth management services and alternative investment solutions. Through their office locations in New York and Hong Kong, the company serves a global client base comprised of private investors, their families, businesses, and institutions.

Media Contact
Jack Chu
+852 5808 6722

Source: National AIM

Categories: Finance, Investments, Business Finance

Tags: alternative investments, Hong Kong, National AIM, New York

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