A wide range of financial assets have soared over the past few years, with both the S&P 500 index and the Dow Jones Industrial Average hitting record highs Friday.
So what's an investor to do?
"I think it's the time to be a little bit cautious," ace investor Wilbur Ross, CEO of WL Ross, tells CNBC
. "Think about it. We've had all-time highs repeatedly during this year. The obvious corollary of that is there are fewer and fewer really inexpensive things."
He can understand why so many investors are heavily weighted toward U.S. Stocks.
"I think it's mostly due to a lack of alternatives. Think about it, everybody's frightened about buying long-term bonds, because they know the next swing in rates will be up," Ross notes.
"Short-term paper doesn't give very much of a yield. And until very recently most commodities weren't doing anything. . . . Meanwhile, earnings growth is around 7 percent. And there's certainly nothing wrong with that. Particularly when you compare it with Europe."
Strong earnings have played a major role in boosting stocks over the past month.
As for China's interest rate cut Friday, "I think it's a very positive development, because it's the early stages of quantitative easing," he explains.
"I think they've needed that because when they would try to tighten against the real estate excesses, they put in draconian measures in the money market. So I think it's a very good move and a useful one."
China's economy grew an annual 7.3 percent in the third quarter.
When it comes to Europe, "so far [European Central Bank president] Mario Draghi has done a better job of jawboning than actually of putting money to work," Ross adds.
"Last time I looked, the ECB's balance sheet was still quite a bit below where it peaked in 2012. So that's not really a very stimulative thing."
The eurozone needs to deregulate their labor markets, reduce bureaucracy and implement social reform, Ross argues.
On the equities front, many investors remain bullish. Part of that enthusiasm comes from the divergence in policy between the Federal Reserve and overseas central banks, such as the ECB and Bank of Japan.
"All these central banks are getting involved again, while the U.S. is falling back and doing less," Tom Carter, managing director at brokerage JonesTrading, tells The Wall Street Journal
. "It's good for our market on a relative basis, and our market is taking off."
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