In a search for growth, many investors have done well seeking out popular stocks. Whether it’s meme stocks discussed on forums such as Reddit’s WallStreetBets or options-driven tech stocks, there are plenty of rags-to-riches stories amid the market mania of recent years. Of course, there are also hot stocks to avoid, particularly for investors who believe another bull market may not be right around the corner.
Various macro indicators suggest we could be due for a prolonged period of pain in equity markets. Along with still-stretched valuations, many companies are seeing margin pressures as inflation rears its ugly head. Meanwhile, the Federal Reserve is seeking to cool inflation by hiking interest rates. Analysts are revising earnings estimates lower, suggesting the fundamental growth stories many investors bought into may not be so solid.
For those taking a more cautious view of the markets, here are three hot stocks to avoid.
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