Are We Experiencing a Stock Market Bubble?

Posted: 5/10/2013 10:46:40 EDT
As the markets continue ever upwards, many investors are getting nervous that a major market pullback is not far off. Is this a market bubble, and should we be preparing for it to burst?

In the video below, Fool contributor John Reeves takes a look at some analysts' opinions on whether or not we are experiencing a bubble at the moment, and he discusses some of the stocks contributing to these all-time market highs. Finally, John tells investors how to play today's dizzying market highs the Foolish way: by investing for the long term.

Sam Zell on Market: A 'Giant Game of Musical Chairs'

CNBC's Jeff Cox reports on comments from Sam Zell at the SkyBridge Alternatives conference in Las Vegas this week:

Sam Zell looks at the stock market and doesn't like what he sees: Zooming prices that normally would come with economic prosperity are hard to find in the current environment.

"We have this sense that there's this giant game of musical chairs going on. Everybody's scared that they're walking around and they've got to keep going because the music's playing. They're absolutely panicked because there's not going to be a seat when the music stops. That's not investing, that's speculation."

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Bernanke: Fed Is Monitoring the Risks from Excessive Risk-Taking

From MarketWatch:

WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke on Friday said the U.S. central bank was monitoring for signs of excessive risk-taking, such as “reaching for yield,” given low interest rates.

In a speech devoted to the vulnerabilities in the financial system, Bernanke identified the search for yield, the threat of a run on money-market funds and the possibility that short-term wholesale markets could dry up in a crisis.

“In light of the current low interest-rate environment, we are watching particularly closely for instances of ‘reaching for yield’ and other forms of excessive risk-taking, which may affect asset prices and their relationships with fundamentals,” Bernanke said at a Chicago banking conference.

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