The National Association of Active Investment Managers (NAAIM) Exposure Index, which tracks the average exposure to U.S. stocks by active investment managers, has tallied above 100 for the first time since July 2024.
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That comes amid fears of an AI bubble with big tech spending heavily on AI infrastructure as the S&P 500 (SPX) trades near an all-time high. The benchmark index is also trading at a forward price-to-earnings (P/E) ratio of 23x, well above its 20-year average of 16x.
Investors Prepare for 2026 amid a Potential Bubble
Investors expect strong economic growth in 2026, along with lower interest rates and market-supporting measures from President Trump, according to Bank of America. “AI equity leadership ain’t budging for time being and we like gold & China stocks as best boom/bubble hedges,” wrote BofA analysts led by Michael Hartnett in a note.
Previous strong market uptrends and bubbles have shown that it’s best to ride the wave until it falters. When that will actually occur is the million-dollar question.
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