Recently, interest in stocks and virtual assets has been heating up again among investors. However, there are numerous warning signs suggesting that it may be too soon to get excited. The Wall Street Journal (WSJ) recently diagnosed that "the market could be in a bubble right now," and highlighted five warning signals that investors should pay attention to.

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A prime example is the U.S. real estate platform 'Opendoor Technologies.' Despite the ongoing slump in the U.S. real estate market, this company's stock price skyrocketed by 377% in just one month. The stock, which was trading below $1, jumped to $2.54. In addition, companies like Kohl's, which was struggling due to poor performance and a CEO change, as well as lesser-known names like GoPro and Krispy Kreme, have also seen sharp rises in a short period. WSJ views this trend as a classic sign of a bubble, where money is flowing into unprofitable small and mid-cap stocks, 'meme stocks,' and virtual assets. Some analysts even compared the situation to the 2021 'GameStop' incident.

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Bitcoin prices have also been rising rapidly. However, some companies are now buying large amounts of Bitcoin and using their own stocks as 'indirect Bitcoin investment products.' According to WSJ, more than 60 listed companies hold Bitcoin, and their stock prices are rising regardless of their own fundamentals. The problem is that if Bitcoin prices plummet, the stock prices of these companies could collapse as well, and this shock could spread throughout the market.

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There has been talk that the market was being driven only by a few major tech stocks, but recently, the opposite trend has emerged. The third signal is that stock prices are rising evenly across traditional sectors such as banking, industry, and communications. The KBW Nasdaq Bank Index has risen by more than 7% over the past month, and stocks like GE Vernova and The Trade Desk have surged by over 20%. More than half of the S&P 500 stocks have surpassed their 50-day moving averages, another sign of an overheated market.

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There is growing concern that stock prices have become excessively expensive. In particular, the 'equity risk premium' is now said to be close to zero. Simply put, this means that the potential gains from investing in stocks are almost the same as those from investing in government bonds. Normally, stocks are riskier and should offer higher returns, but now that expected return has nearly disappeared. As a result, many investors are worried, asking, "At this point, aren't stocks just too expensive?"

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The final warning sign is the disconnect from economic fundamentals. On the surface, the U.S. economy does not look bad, but a closer look reveals some concerning details. Since June, the consumer price inflation rate has started to rise again, and the private employment growth rate has fallen to its lowest level in the past eight months. Experts warn that once employment slows, recovery is not easy. Despite this, the stock market is reacting with excessive optimism, which is unusual.

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It is natural to feel pleased when stock prices rise, but when multiple warning signals are flashing at the same time, it is wise to slow down and take an objective look at the market. Especially when assets with no earnings or those that are overly speculative are rising, being swept up in the trend can be risky. Taking a moment to think carefully could help protect the health of your investments.