The stock market boom will continue this year as many people “finally start to realize that we are in a bull market,” investment manager Richard Bernstein said on Thursday.

Speaking at a luncheon meeting in Manhattan, Bernstein, founder of Richard Bernstein Advisors, expressed optimism about the markets for this year. As far back as 2011, Bernstein was one of the few to predict that the current bull market could be powerful and might even rival or exceed the 1982-2000 market.

“We are still very bullish on the global equity markets in 2018 based on our previously stated considerations of improving global profits, significant liquidity and investors general hesitancy to embrace equities,” the advisory firm recently wrote in a report.

Bernstein, at the meeting, said the market fundamentals are still good. “For the time being I would say that we are on the high side of fair value,” he said.

But he noted that many investors have been standing on the sidelines over the past eight years or have overinvested in bonds. That has resulted in “painful missed opportunities,” Bernstein said. Now many of those investors seem ready to buy equities.

The equity party will continue in 2018, said Bernstein, who noted that the bull market is about to approach its ninth anniversary. 

When should one put away the booze and stop drinking double portions of equities?

Bernstein says his firm looks for three factors to indicate when a bull market is going to end and a bear market will start. Profit cycles, not economic cycles, are the key to the stock market, he said.

“Wwhat we are finding is that profits around the world are generally accelerating. Growth rates are getting better. It is very difficult to say that, when profit rates are increasing, you’re going to get a bear market,” Bernstein said.

Another factor that would lead investors to turn bearish would be a lack of liquidity. “And today there is a ton of liquidity,” Bernstein said.

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