Most of the time, expensive stocks badly underperform. Photograph: iStock

Number of ‘extraordinarily’ costly stocks in MSCI World index at all-time highs

Tesla electric car: Manic activity in stocks such as Tesla is contributing to the fourth great bubble he has witnessed, says Jeremy Grantham of GMO. File photograph: iStock

GMO founder points to share price increases, surge in IPOs and manic activity in stocks

Citigroup strategists expect stocks to tread water this year. Photograph: iStock

Valuations and the recent market melt-up will limit any 2021 advance

The technology sector explains about two-thirds of Europe’s underperformance relative to the global index, Barclays notes. Photograph: iStock

2021 should be a better year for European stocks, but structural problems remain

You can’t predict the future. Photograph: iStock

Given forecasters got it wrong in 2020, why believe their predictions about 2021?

‘2021 could be a very, very good year in markets,’ says hedge fund manager Bill Ackman. Photograph:  Michael Nagle/Bloomberg

After roller-coaster ride for stock markets in 2020, a robust earnings rebound is expected

2020 was a year to forget for the UK stock market. Photograph: iStock

Mass Covid vaccination and Brexit clarity ‘may mark beginning’ of better times

The bear and bull statues outside the Frankfurt Stock Exchange. Photograph: Alex Kraus/Bloomberg

In a calmer 2021, momentum is with Europe, with Euro Stoxx 600 set to make 7% gains

The sell ratings are often superficial and uninformative, a pretence to give the illusion of objectivity. Photograph: iStock

Study suggests the problem is many firms put little thought into their sell ratings

Tourists pose with the Wall Street bull in New York. Photograph: Andrew Harrer/Bloomberg News

Bets on market falls had been at their lowest level in two decades

The Santa Claus rally refers to the last five trading days of December and the first two trading days of January. Photograph: Rolex Dela Pena/EPA

Research suggests Christmas strength is evident across most international markets

This proves costly for pension fund investors, as hired managers then underperform over the next three years. Photograph: iStock

New study finds funds ignore advice about past performance

The consensus is that another decade of US outperformance is increasingly unlikely. Photograph: iStock

Estimates that US annual returns will be as much as 8% lower over next decade

“Airbnb may yet justify investor optimism, assuming people’s appetite for travel resumes following mass vaccination.” Photograph: iStock

Airbnb making strong comeback as market capitalisation exceeds $100 billion

Economist Robert Shiller has developed a new measure, the excess Cape yield, which considers both equity valuations and interest rates. Photograph: Taylor Hill/Getty Images

Economist agrees US stocks’ high Cape ratio is justified with zero-interest rates

Environmental, social, and corporate governance funds “are going from virtue signalling to value signalling”, according to the Amundi/Create Research survey. Photograph: iStock

Survey shows 82 per cent of respondents expect to increase ESG allocations over time

Barclays forecasts that European earnings will spike by as much as 45 per cent in 2021. Photograph: iStock

Stoxx 600 had its biggest-ever monthly advance in November

In the US, energy enjoyed its second-biggest monthly gain  in November. Photograph: Michael Nagle/Bloomberg

Indices had massive gains last month but that’s par for the course, says LPL Research

Buying at all-time highs might seem risky but waiting for a correction can be a very costly and painful affair. Photograph: iStock

Buying all-time highs can be scary but the reality is new highs are normal

Free trading, it seems, can be a costly business. Photograph: iStock

Experts note first-time investors tend to be drawn to ‘attention-grabbing’ stocks

US president Donald Trump continues to claim credit for market gains. Photograph: Erin Schaff/New York Times/Bloomberg

S&P 500 enjoys second-best post-election performance in history

Traders work on the floor of the New York Stock Exchange. Technically, indices are extended; 91 per cent of S&P 500 stocks last week traded above their 200-day moving average. File photograph: Spencer Platt/Getty Images

Extended markets tend to be followed by mixed near-term results

JPMorgan strategist Michael Cembalest warned about the dangers of listening to forecasters “whose apocalyptic comments spread like wildfire”. Photograph: iStock

Markets now at all-time highs with further gains expected in 2021

Tesla has gained almost 500 per cent in 2020. Photograph: Daniel Leal-Olivas/AFP via Getty Images

Electric-car maker gains $100 billion in market capitalisation

Global growth and profit optimism is now at a 20-year high. Photograph: iStock

Time to cash in on Covid-19 vaccine rally fast approaching

 Stocks fell heavily on Wednesday, even though we got more good vaccine news. Photograph: Joel Saget/AFP via Getty Images

Inflows into stock funds hit 20-year highs as equities soar on Covid-19 vaccine news

The FAANGs – Facebook, Apple, Amazon, Netflix and Google – seemed unstoppable for most of 2020. Photograph: Robert Galbraith/Reuters

Positive news on Covid-19 vaccine led investors into under-owned value stocks

Investors have piled into stocks such as  Facebook, Amazon, Google and Netflix this year. Photograph: Getty Images

It may be time for tech high-flyers to take a breather

US pharmaceutical giant Pfizer and German biotech firm BioNTech announced their coronavirus vaccine was more than 90 per cent effective in preventing Covid-19 among those without evidence of prior infection, according to new data. Photograph: Jakub Porzycki/NurPhoto

Pfizer’s announcement last week was great for 2020’s losers but not for 2020’s winners

Last Monday, European value stocks outperformed their quality counterparts by more than on any other day over the last 18 years. Photograph: Alex Kraus/Bloomberg

Global investors are rotating into beaten-down value stocks and cyclicals

“The sheer speed of the recent market gains will unnerve some.” Photograph: The New York Times

Is it risky to be buying at these elevated levels?

US president Donald Trump. Photograph: Brendan Smialowski/AFP

US outperformance hasn’t been driven by president, but don’t expect him to buy that line

Markets responded to last week’s US presidential election by posting their biggest post-election day rally in 120 years. Photograph: Jim Watson and Dominick Reuter/AFP

Market rallies are the usual outcome of a close election despite who wins, says investor

Traders work at the New York Stock Exchange. Photograph: Johannes Eisele/AFP/Getty Images

Market impact of conservative versus liberal election outcomes ‘surprisingly similar’

The S&P 500 has moved more than 1 per cent on almost half (47 per cent) of trading days in 2020, notes Datatrek Research. Photograph: iStock

September saw double-digit correction, only for stocks to rebound rapidly

Do stocks do better under the Democrats? Photograph: Getty

Does history offer any clues to which US political party is better for stocks?

Donald Trump and Joe Biden square off during the first presidential debate. Photograph: Jim Watson, Saul Loeb/AFP via Getty

It’s best to keep an open mind and not let one’s politics affect one’s investment outlook

Donald Trump ‘knows what awaits him once he relinquishes the presidency’. Photograph: Sarah Silbiger/Getty

Over 70% of fund managers believe contested election poses the biggest risk to equities

New York Stock Exchange

Predicting the election winner is one thing, predicting the market response is another

Since 1950, November and December have been the strongest months for US stocks. Photograph: Michael Nagle/Bloomberg

Analysts suggest holiday cheer helps generate outsized returns

Democratic candidate Joe Biden speaks during the second and final US presidential debate last Thursday in Nashville, Tennessee. Photograph: AP Photo/Julio Cortez

Pro-Biden sentiment is especially strong in Europe

Democratic US presidential candidate Joe Biden during the final presidential debate  in Nashville, Tennessee, last Thursday. Photograph Jim Watson/AFP via Getty Images

Blue wave and substantial fiscal stimulus looks increasingly likely in US

Tesla is now worth eight times as much as GM, 10 times as much as BMW, and 13 times as much as Ford. Photograph: Felipe Trueba/EPA

Electric car maker now valued at more than $400 billion

Traders work on the floor of the New York Stock Exchange. Photograph: Spencer Platt/Getty Images

History shows recovery swings are almost always followed by gains

The re-election of US president Donald Trump looks increasingly unlikely – the probability of a Joe Biden victory is now 87 per cent, according to polling expert Nate Silver. Photograph: AP Photo/Evan Vucci

‘Blue wave’ would likely result in higher US economic growth, major firms say

Amazon is expected to report sales of $91.6 billion – $23 billion more than what it reported a year ago. Photograph: Ina Fassbender/AFP

Netflix, Tesla and Amazon reporting earnings this week

Morgan Stanley says investor sentiment and positioning towards Europe is “structurally low”. Photograph: Justin Lane/EPA

Europe has gradually shifted towards more growth-orientated sectors

Once appointed, overconfident chief executives are less likely to learn on the job. Photograph: iStock

Stocktake: New paper indicates cocky candidates more likely to get the top job

An Exxon petrol station in Arlington, Virginia. Photograph: Jason Reed/Reuters

Many of the biggest market winners eventually become the biggest losers

Ordinary investors have been sceptical ever since this rally began in March. Photograph: iStock

Investors are more worried about a market crash than at any time over the past 20 years

As a general rule, analysts tend to be an optimistic bunch. Photograph: EPA

A little depressive realism might do optimistic analysts no harm at all

Executives who were members of extramarital affairs website Ashley Madison were much more likely to work at companies that restated earnings, research shows.

Executives who cheat on their spouses also cheat in the workplace, paper claims

August’s excesses were especially marked, leaving markets in extremely overbought territory. Photograph: iStock

This is still a bull market, so it’s wise to give stocks the benefit of the doubt

Odds of a constitutional crisis are hard to estimate, but they appear very real, given Donald Trump’s alarming refusal last week to commit to a peaceful transfer of power. Photograph: Mandel Ngan, Jim Watson/AFP/Getty Images

Good news for investors is politics-related sell-off is likely to generate a decent buying opportunity

The tech’s sector’s weighting in 2020 is greater than at any time since the dotcom bubble. Photograph: iStock

Claims tech stocks’ recent run resembles the dotcom era are wide of the mark

New York Stock Exchange. ‘Using the law of attraction in your day trading is an excellent tool to add to the charts or fundamentals that you already use’, according to one website. Photograph:  Bryan R Smith/AFP via Getty Images

Visualise winning and make it happen – it’s nonsense of the highest order, of course

Bulls and bears. Frankfurt Stock Exchange in Frankfurt, Germany. Photograph: Peter Juelich/Bloomberg

Fears of a tech bubble cited as the second-biggest tail risk (no prizes for guessing the first)

A  Trump campaign rally in  Wisconsin. He claims  a Joe Biden presidency would result in “a depression the likes of which we haven’t seen in this country”. Photograph: AP Photo/Evan Vucci

Research shows the Dow has averaged annualised gains of 9.9% under Trump – right in line with historical averages

Snowflake  is a cloud-computing company. Photograph: Gabby Jones/Bloomberg

The prevailing attitude among investors now is one of buy high, sell higher

If the US bull market resumes, momentum traders will likely seek to ride Tesla higher once again – irrespective of any valuation concerns. Photograph: Hannelore Foerster/Bloomberg News

With the stock now having lost third of its value, has valuation sanity been restored?

 Tesla head Elon Musk. The company lost a third of its value in a week, but still the stock remained above its 50-day moving average. Photograph: Maja Hitij/Getty

Both bulls and bears can use recent stats to support their investing theses

History’s fastest bear market was also the shortest. Photograph: Alex Kraus/Bloomberg

It has been a crazy, record-breaking year, with unprecedented twists and turns

The study identified partisan Republicans on an investor social platform by searching for terms such as ‘MAGA’, ‘stupid Dems’ and ‘liberal media’. Photograph: Tannen Maury/EPA

Partisan Republican investors ‘relatively unfazed’ about coronavirus impact

Warren Buffett began investing at the age of 10; if he had waited until he was 30, an analyst noted, his fortune would be 97.6 per cent less than it is today. Photograph: Rick Wilking/Reuters

Legendary Berkshire Hathaway chief began investing 80 years ago at the age of 10

A street sign  on the site of the future US electric car giant Tesla  in Gruenheide near Berlin. Photo graph: Odd Andersen/AFP via Getty Images

Valuation expert ‘floored’ by the market reaction

The “Fearless Girl” statue stands in front of the New York Stock Exchange  at Wall Street  in New York City. The S&P 500 soared 7 per cent in August alone, its best August since 1984. Photograph:  Angela Weiss/AFP  via Getty Images

Historical precedent suggests any reduction will be fleeting

Until last week Apple accounted for 12%  of the Dow, but that has now fallen to just 3%. That is because the Dow is weighted by price not by market capitalisation. Photograph: Getty Images

UnitedHealth Group is now the Dow’s most important constituent – it has twice as much influence on the Dow’s movements as Apple

Diversification requirements mean many funds cannot have more than 5 per cent of their weighting in one stock and not more than 25 per cent in any one sector. Photograph: Johannes Eisele/AFP via Getty Images

Managers forced to underweight big five tech stocks may underperform market as a result

The Fearless Girl statue stands in front of the New York Stock Exchange on Wall Street. Photograph:  Angela Weiss/AFP via Getty Images

The five biggest technology stocks now account for a quarter of S&P 500’s total market capitalisation

In the fast lane: Tesla has experienced a tenfold share price increase in less than a year. Photograph: John Thys/AFP via Getty Images

The carmaker, valued at ‘just’ $256 billion a few weeks ago, has topped $400 billion

The Apple store on Regent Street, London. In June, Apple and Microsoft were jostling for the position of America’s most valuable company. Photograph: Victoria Jones/PA Wire

Veteran companies Netflix, Facebook, Microsoft, Apple are all continuing to grow

Apple’s headquarters in London. The company accounts for 7 per cent of the S&P 500’s total market capitalisation. Photograph: Andy Rain/EPA

Stocktake: By limiting exposure to the big five, this year’s stats may be worse than usual

LPL Research data reveals returns get better after a long time without new highs.

Don’t make error of imagining high prices presage poor returns

Apple surpassed a value of $2 trillion, regaining the position of the world’s most valuable company. Photograph: Armando Babani/EPA

Have markets gone from being too pessimistic to being too optimistic?

Photograph: Spencer Platt/Getty

The data suggests accusations of irrational exuberance are wide of the mark

Five technology companies – Apple, Amazon, Microsoft, Alphabet (Google) and Facebook – account for almost a quarter of the S&P 500’s total market capitalisation. Photograph: Lionel Bonaventure/AFP via Getty

One strategist says he has never seen market so highly valued in a time of such uncertainty

 Amazon and Apple are up over 70 and 50 per cent respectively in 2020, but many stocks are still struggling. Photograph: Kimihiro Hoshino/AFP via Getty Images

Half the stocks in the S&P 1500 remain at least 20 per cent below their own highs

Tesla stocks continued to advance on Thursday, ensuring a two-day gain of 18 per cent. Photograph: David Paul Morris/Bloomberg

Shares jumped 13 per cent after this week’s announcement of a five-for-one stock split

 ‘If gold did not reward inflation fear in 1980 and 2011,’ the authors of a new paper ask, ‘why should it reward inflation fear now?’ Photograph: Narong Sangnak/EPA

Paper says that since the 1970s, high gold prices have occurred when there is marked concern about high future inflation

It took 100 trading days for stocks to gain 50 per cent, which is the biggest 100-day gain in 87 years, according to Bespoke Investment. Photograph: Mick Tsikas/EPA

History suggests momentum will carry stocks higher in the coming months

The ‘Fearless Girl’ statue stands in front of the New York Stock Exchange on Wall Street. Photograph: Angela Weiss / AFP via Getty Images

Most US firms have reported earnings and a record 82% have beaten estimates

A trader makes a phone call on Wall Street in New York City. File photograph: Johannes Eisele/AFP via Getty Images

The big five are now so dominant it is creating lopsided daily readings

Boohoo chief executive John Lyttle. Photograph: Dara Mac Dónaill

Multiple funds failed to notice poor working conditions at UK suppliers to online retailer

We focus on the Apples and the Microsofts, but forget about the Amstrads, the Nortels and the Commodores. For every big tech winner there are many more big losers. Photograph: Getty Images

New research suggests the tech sector is often a graveyard for investors’ dreams

The New York Stock Exchange. Photograph: Michael Nagle/Bloomberg

Day traders are not reflective of overall sentiment

The Fearless Girl statue in front of the New York Stock Exchange at Wall Street. Photograph: Angela Weiss/AFP via Getty Images

Almost half surveyed in latest AAII poll were bearish

Facebook, Amazon, Netflix, Microsoft, Apple, and Google (FANMAGS) – in aggregate, the stocks trade on 7.7 times revenues and 55 times earnings, according to Verdad Capital. Photograph: Stan Honda/AFP/Getty Images

Report warns about paying exorbitant revenues for exciting growth stocks

US president Donald Trump at a news conference at the White House in which he announced that Eastman Kodak would receive a loan to manufacture ingredients used in pharmaceuticals. Photograph: Alex Wong/Getty Images

Rally driven by news of government loan to help produce coronavirus treatment

Insider selling is a fallible indicator. Photograph:  Cyril Marcilhacy/Bloomberg

Executives are selling five times as much stock as they are buying

Apple: huge stock price gains recorded this year. Photograph:  Josh Edelson / AFP via Getty Images

First year when stocks gain after being down at least 30 per cent at some point

Traders on the floor of the  New York Stock Exchange: Today’s market is even more concentrated than the late 1990s technology bubble. Photograph:  AP Photo/Richard Drew

Investors will be hoping market breadth improves

A trader makes a phone call outside the New York Stock Exchange. Photograph: Johannes EISELE/AFP via Getty Images

Expensive markets can become more expensive in the short-term

Shorts have to get the timing right to guard against potentially unlimited losses. Photograph: iStock

Stocktake: Shorts had to pay high interest fees in order to bet against Wirecard

Climate activists protest outside a Barclays bank branch in Piccadilly in London, on Wednesday. Photograph: Simon Dawson/Bloomberg

UK stocks outperformed cash in 69% of two-year periods, historical survey shows

The Fearless Girl statue stands in front of the New York Stock Exchange on Wall Street. Photograph: Angela Weiss/AFP via Getty Images

Investors ‘positioned for bad news’ on coronavirus and ecomony, survey shows

Elon Musk overtook Warren Buffett last week to become the seventh-richest man in the world. Photograph: iStock

Does it make sense that Tesla’s valuation almost doubled in two weeks?

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