Risk tolerance increases with rising bubble fears

Eric Rosenbaum at CNBC wrote on Sunday that the wealthy are investing like a market bubble is here, or at least near.

However, Rosenbaum noted that these investors remain invested according to a survey by E-Trade Financial.

“In fact, amid rising bubble fears these same investors say their risk tolerance has increased, significantly, in the first quarter of 2021, and the majority expect stocks to end Q1 with more gains,” he wrote.

Mohamed El-Erian, the president of Queens College at Cambridge University and the Chief Economic Adviser to Allianz, appears to agree with these investors' stance.

In an interview with Yahoo Finance Live, El-Erian said: “If we were to see another 20 basis point move in yields, that would be bad news.”

However, he added that the Federal Reserve is unlikely to raise rates soon.

“To be clear, the path of least resistance right now is higher,” El-Erian said.