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Outside the Box: Stock prices look attractive now — compared to bonds

Are U.S. stock prices far too high or way too low? Neither. Stock prices in fact seem fairly reasonable.

I know this answer seems wishy-washy, but it is needed to counter the gloom-and-doomers who predict an impending market crash.

For example, MarketWatch columnist Mark Hulbert recently presented data suggesting that “the stock market is overvalued according to almost any standard valuation measure.” He shows six different measures (P/E, CAPE, dividend yield, price/book, price/sales, and q-ratio) that indicate that stock prices are 85% to 100% higher than they should be, suggesting that a 45% to 50% market correction is needed for stocks to be fairly valued.

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