Are stock prices getting out of hand? Lewis Altfest doesn’t think we’re in a bubble -- not yet anyway -- although he points to Twitter, biotech, Netflix, Tesla and even small caps as examples of market speculation.

“Stocks are no longer a bargain,” says Altfest, whose fee-only financial management firm is based in midtown Manhattan. “They’re fairly priced, bordering on the higher side of fair.”

For the year to date, stocks are up more than 25% -- so if a 10% annual gain is average, Altfest says, “then stocks just gave you two-and-a-half years of return.” Down the road he believes investors are “going to have to give some of that back.”

Altfest takes an even dimmer view of bonds. “Make a face and turn away,” he quips. (An exception, he says, are munis: With rates at 4.75% -- the rough equivalent of 8% to maturity on a pre-tax basis -- he thinks these bonds provide acceptable returns.)

But with stocks increasingly expensive and bond returns paltry -- what’s an advisor to do? Nothing radical for the moment, Altfest cautions. “Keep the allocation you have.” Stocks, he says, are still attractive, if less so than before. The important thing, he says, is to “watch the markets closely and see if speculation keeps running. At some point, it’s time to go -- but not now.”

It’s also time, he says, to put some money into Europe. Since Europe lags the U.S. in its business cycle, “it has room for and will probably get some significant margin improvements, so the continent’s markets could do pretty well near term.”

There is a risk around the euro, he acknowledges, “but that won’t materialize right now. Germany is looking the other way -- and the other guy’s business is getting better.” By the ’other guy,’ he means Greece, Ireland and Spain, where investments have begun to return and stock markets are improving. “They’re getting some action -- nothing overwhelming --but they’re seeing some action in the economy.”

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