Could a huge stock market bubble happen again?

It's a tempting time to jump into the stock market. The S&P 500 continues to register new highs and has climbed an incredible 23% so far this year. That's on the heels of a 22% gain in 2023. But now isn't the time for greed, says famed economist David Rosenberg. In notes to clients this month, the founder of Rosenberg Research, who called the 2008 recession, warned that the market is overvalued, eventually setting investors up to get burned. When this mega-bubble pops, it will be spectacular," he added on October 18. "This is no time to chase momentum or the herd mentality." Rosenberg said a large reason for his bearish outlook is a trifecta of measures sitting two standard deviations outside of average values: positioning in stocks, market valuations, and investor sentiment. While he didn't cite specific measures in his notes, many widely followed indicators corroborate these assertions. For investor positioning, here's household equity ownership as a percentage of assets as of the start of this year. North of 40%, it exceeds levels reached during the dot-com bubble.