If a Market Crash Is Coming, Here's the 1 Thing You Should Do, According to Warren Buffett
It pays to listen to one of the world's best investors.
Overview
The short answer to the question of whether a market crash is coming is yes. It's a trick question and answer, of course, because there's bound to be a market crash at some point, but no one can tell you when that's going to be.
The reason it feels more urgent today is that there are indications that it's going to happen sooner rather than later. The CAPE ratio, a metric that measures the average price-to-earnings ratio for the S&P 500 (SNPINDEX: ^GSPC) and adjusts for inflation, is nearing a level it reached only one time before, precipitating a market crash. The Buffett indicator, which measures the total value of the stock market relative to U.S. gross domestic product, is at 210%, and values over 100% start to look expensive.
Warren Buffett. Image source: The Motley Fool.
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Source
Originally published at www.fool.com.