Tired of being scared yet?

Author: Richard Bernstein

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Dec 08, 2014, 03:22 ET

BOSTON, Dec. 8, 2014 /PRNewswire/ -- Bull markets are based on climbing the proverbial "wall of worry," and this cycle has been no different.

We have consistently argued over the past five years that the current bull market could be one of the biggest of our careers. Both investors and corporations continue to act conservatively because of the uncertainty caused by a litany of issues. Uncertainty is typically the engine of bull markets.

Here's a subjective list of 50 concerns in this cycle's "wall of worry." Admittedly, we have grouped contradictory fears together to add a bit of humor, but we are not at all passing judgment on any particular concern. However, the list is long and has been relatively fruitless. One has to wonder when investors will grow tired of being so scared.

1. Corporate profit growth isn't sustainable.

2. Profit margins will fall.

3. Corporate taxes are too high.

4. Corporate taxes are too low.

5. The stock market is extremely overvalued.

6. Buybacks are the only factor supporting the stock market.

7. Small businesses can't grow.

8. Employment is abnormally weak.

9. Wage pressures will cause inflation.

10. There's too much regulation.

11. There's too little regulation.

12. The government is too big.

13. The government isn't doing enough.

14. The government won't support energy investment.

15. Capex growth is anemic except within the energy sector.

16. The ECB is too loose to benefit the PIIGs.

17. The ECB is too tight and is fueling deflation.

18. Corporations are too uncertain to hire and invest.

19. Corporate profits are an unsustainably large proportion of GDP.

20. Monetary policy has been impotent.

21. The economy can't survive without QE.

22. The U.S. has too much debt.

23. The U.S. budget deficit is too large.

24. The U.S. is debasing the dollar.

25. The strong dollar will hurt earnings.

26. The Fed's policies will cause inflation.

27. Deflation is spreading around the world.

28. Treasurys are in a bubble and have disconnected from the economy.

29. Low rates are forecasting economic weakness.

30. Invaders.

Terrorism
Immigration
Ebola

31. The separation of wealth is historically wide.

32. The owners of capital are being targeted.

33. Pensions will bankrupt municipalities.

34. Public employee unions are being targeted.

35. There's too much uncertainty to take risk.

36. Investors are taking too much risk.

37. Developed economies will suffer in the "new normal."

38. Expectations for the emerging markets are too optimistic.

39. China credit markets are an accident waiting to happen.

40. Geopolitics

Iraq
Iran
ISIS
al-Qaida
Syria
Israel/Palestine
North Korea
Argentina default
Brazil election
Russia/Crimea
Russia/Ukraine
Russia/NATO
Japan tsunami
China/Japan
China/Taiwan
China/Hong Kong

41. High oil prices will hurt the consumer.

42. Low oil prices reflect the weakness in the economy.

43. Housing will be a drag on the economy.

44. Housing is in another bubble.

45. Bond spreads are too wide.

46. Credit downgrades will be numerous.

47. Bond spreads are too narrow.

48. Sentiment is overly optimistic.

49. Derivatives are dangerous.

50. Hedging downside risk is critical.

This information was prepared by and has been reprinted with the permission of Richard Bernstein Advisors LLC. The views expressed herein are those of Richard Bernstein Advisors LLC. Information provided and views expressed are current only through the month stated on top of each page (November 2014). The opinions herein are not necessarily those of the Eaton Vance organization and may change at any time without notice. The information contained herein has been provided for informational and illustrative purposes only and is not intended to be, nor should it be considered, investment advice or a recommendation to buy or sell any particular security. Investors should consult an investment professional prior to making any investment decision. While information is believed to be reliable, no assurance is being provided as to its accuracy or completeness.

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