Americans have more cash in stocks than ever, a ‘red flag’ for equities. Where to shift your money instead for 2026

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The U.S. banal marketplace has surged to caller highs precocious — bully quality for investors, astatine slightest connected the surface. But with Americans present holding much of their wealthiness successful stocks than ever before, immoderate economists pass that what comes adjacent whitethorn beryllium acold little rosy.

John Higgins, main markets economist astatine Capital Economics, says Americans’ banal ownership has adjacent surpassed levels seen successful the precocious 1990s — close earlier the dot-com roar went bust (1).

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“That should ringing alarm bells, adjacent if the buoyant banal marketplace keeps rising for a portion amid enthusiasm for AI,” Higgins wrote successful a enactment to clients, adding that “the existent precise precocious stock of equities is simply a reddish emblem to ticker closely.”

According to Federal Reserve information cited by CNN, 45% of Americans’ household fiscal assets are present successful stocks — an all-time high. That includes nonstop shareholdings arsenic good arsenic communal funds and status accounts.

Even with periodic sell-offs — specified arsenic the crisp plunge successful 2020 erstwhile the pandemic deed — the broader inclination has been a almighty climb. Over the past decade, the S&P 500 has returned much than 230% (2), portion the tech-heavy Nasdaq Composite has soared astir 430% arsenic of December 2025 (3).

Still, Rob Anderson, U.S. assemblage strategist astatine Ned Davis Research, points retired that grounds levels of banal ownership person historically coincided with accrued hazard of a downturn.

“Investors shouldn’t expect the aforesaid magnitude of returns that we’ve seen during the past decennary to repeat. Going forward, implicit the adjacent 10 years, there’s astir apt going to beryllium a downshift successful returns,” Anderson cautioned.

And economists aren’t the lone ones worried. A caller Bank of America survey recovered that 91% of money managers judge U.S. stocks are overvalued — the highest speechmaking successful information going backmost to 2001 (4).

Even seasoned investors are taking cover. Legendary capitalist Jim Rogers precocious revealed that he’s sold each his U.S. stocks, informing he’s “seen this enactment before” (5). And Warren Buffett’s Berkshire Hathaway has been making different investors tense since 2024 by selling disconnected ample quantities of banal each 4th (6).