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Charles Schwab’s Jeff Kleintop is on bubble patrol.
 
The veteran investment strategist devoted a report earlier this week to identifying asset classes where bubbles could emerge and dent the portfolios of investors who play these areas aggressively.
 
They are cryptocurrencies such as bitcoin, low-volatility plays and Internet retailers.
 
Luckily for investors, Kleintop writes, these candidates “do not seem to fit the classic bubble profile and may pose less potential damage to the broader markets and economy if they were to burst.”

Best of all, the U.S. stock market, eight years into a bull market and the place where many of us keep most of our assets, is not on the list and probably shouldn’t be.
 
“The yield curve, which has done a good job of detecting when past bubbles are about to burst, bringing widespread negative consequences, also agrees on the relatively modest risk of a recession and bear market [in stocks] during the next twelve months,” Kleintop adds.
 
Still, these assets classes on Kleintop’s bubble list could carry risks for those who see too much value in them, he writes.
 
As for cryptocurrencies, Kleintop writes that the most popular of them, bitcoin, has surged more than 1000%, but did so much faster than the bubbles that took 10 years to inflate to this level, such as the housing industry. “The shorter amount of time that it took may mean that if bitcoin is a bubble and were to burst, it probably won’t have as broad of a ripple effect on the economy as the technology or housing bubbles did,” he adds.
 
Kleintop also sees an irrational rush to funds that directly play off of low-volatility investing.

“There are specific products that are tied directly to volatility, some of which track the S&P 500 VIX Short-Term Futures Inverse Daily Index, which seeks to reflect the total return for those betting on low volatility for the S&P 500. This index has soared over 800% as it approaches 10 years from the end of the last bull market on October 9, 2007.”
 
The potential bubble emerging in Internet retailers is a well-known story, though many supporters of these stocks argue that their values are justified because of seismic changes in the way consumers buy things.
 
As Kleintop puts it,” aa narrow sub-industry of Internet stocks, Internet retailers, is up well over 1,000% from the low in March 2009.”
 
But Kleintop makes it clear that this is one potential with limited fallout for investors, saving for those who might be betting the farm on the primacy of FANG or FAAMG stocks.
 
“The small size of this sub-industry relative to the overall stock market makes it difficult to label its growth a typical bubble and may limit the ripple effect on the broader market were it to crash,” he writes. “ Unlike typical bubbles which tend to foster a purely optimistic outlook, these companies have already had a negative impact on the stocks of their traditional retail peers, leaving the overall retailing industry (composed of 10 sub-industries including internet retailers) up a smaller 500% over the same period.”
 
Earlier this week, I came across a press release promoting a lengthy feature by Kiplinger’s Personal Finance showcasing the best stock in each of the 50 U.S. states to buy.”
 
Like Barron’s, Kiplinger’s is a sober-minded publication which has dispensed solid personal finance advice over the decades. One of its areas of competence is preparing long reports on the best state to retire in or the states with the lowest tax burdens.
 
These reports are quite useful. But the publication’s latest effort may have taken the state-by-state journalism formula too far. Should any of us being buying a stock just because the company is headquartered in a particular state?
 
The report, for example, gives the same weight to profiling Wesbanco (ticker: WSBC), a community bank holding company that is the West Virginia entry, as it does to Wal-Mart Stores(WMT), Arkansas’ offering.
 
When money is at stake, state pride should take a back seat to more time-honored investing considerations unless you really love your home state.