Whether to buy stocks and what to do with bitcoin: Bloomberg answers five questions about the rally

Market sentiment has gone from panic to excitement in just a few weeks: while back in April analysts were expecting a recession with a probability of more than 50%, in June and July the main US stock indices were already breaking record after record. S&P 500 in just 57 days came out of the "bear" market and soared to a new high, increasing the appetite of traders for risk. Experts and analysts interviewed by Bloomberg advise investors not to lose vigilance in the current situation: the risks have not gone away, although there are still opportunities for investment.

The agency has compiled answers to five key questions about the current rally that investors are now concerned about.

Yes, if you're playing for keeps, according to experts interviewed by Bloomberg. According to them, it can be a reasonable step if you will not need the invested money for at least three years. Historical highs are not necessarily a signal to pause: the market often continues to grow afterward, said Dustin Suttle, co-founder of Suttle Crossland Wealth Advisors. There are powerful psychological mechanisms at work here: new highs attract investors, and demand itself pushes quotes higher, adds Noah Damski, principal at Marina Wealth Advisors. He says a record is, on the contrary, "a buy signal, not a reason to stay on the sidelines." Moreover, Damski warns, fear of a further pullback on the back of growth could be costly in the long run, especially now that yields on "cash" instruments are falling amid expectations of lower rates.

Fearing a high level of risk, Emily Roland of Manulife John Hancock Investment Management advises investors to choose quality companies with sustainable earnings and strong balance sheets - mainly from the technology, healthcare, utilities and infrastructure sectors. It's better to bet on "what you can't do without," she says. She favors the U.S. equity market over the European market, especially after the rally in Europe earlier this year and a weak reporting season for local companies. It's also worth looking at stocks from defense and cybersecurity players, adds Scott Helfstein, Global X's head of investment strategy. He also highlights utility companies and those related to uranium production and nuclear power amid the growing need for energy to power artificial intelligence and automation.

First, you need to analyze why you did what you did, says Robert Jeter, a consultant with Back Bay Financial Planning & Investments. If it was an impulsive decision that you now regret, take that experience into account for the future. To get back into the market, Jeter recommends that investors invest small amounts gradually rather than all their money at once. Such a strategy reduces stress and develops discipline, as well as gives room for further maneuvering: for example, when you see that the market is down and want to buy on the downturn, you will have free funds to do so. Samantha Mockford, a consultant at Citrine Capital, advises those who get emotional during market downturns to think about how they can avoid it next time. For example, create some additional small barriers to sale for themselves. "Simply not auto-filling your login on a broker's website can be the inconvenience that keeps you from constantly checking your account," she says.

Investors are too ignoring risks ranging from Donald Trump's duties to geopolitics, Bank of America's Michael Hartnett and Citigroup's Kate Moore warn in a Bloomberg note. For now, the full picture of how import duties will affect the economy remains unclear, but corporate earnings forecasts already reflect concern, Bloomberg notes. For example, profit expectations for S&P 500 companies have been lowered from 13% in early 2025 to 7.1% so far, according to Bloomberg Intelligence. Experts are also alarmed by the skewed market, with just a few bigtechs like Nvidia, Microsoft and Meta accounting for the lion's share of growth. Many fear their valuations are too high and that a fall in even one of them could pull the entire market down with it. The U.S. Federal Reserve could smooth out the imbalance by cutting rates, according to Bloomberg Intelligence strategists, but is in no hurry to do so: the Fed is planning two policy easings this year, but possible delays or surprises could hit the market.

Bitcoin has added over 15% since the beginning of the year, amid expectations that the Trump administration will support the crypto industry. For those who want to invest, Robert Jeter of Back Bay Financial advises to clearly limit the share of cryptocurrencies in the portfolio - no more than 10% and only with "free" money. According to him, the volatility in cryptocurrencies is enormous, and even experienced investors can have a hard time;

This article was AI-translated and verified by a human editor