If a Stock Market Crash Is Coming, These 2 Growth Stocks Might Be Worth Selling
Stocks with high valuations, like SpaceX and Datadog, can be especially vulnerable when the broader market heads lower.
Overview
The S&P 500 (SNPINDEX: ^GSPC) is hovering near a record high, but the large-cap index's lofty valuation could limit its upside potential from here. It currently has a Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio of 41.8. That makes this the second-most-expensive market in history, behind only the peak of the dot-com bubble in 1999 and 2000.
A number of catalysts could derail this euphoric bull market, including the conflicts in the Middle East, high inflation, Federal Reserve interest rate hikes, and the midterm Congressional elections in November. Therefore, this might be a good time for investors to take some money off the table.
Details
Stocks with high valuations tend to be the most vulnerable to sharp corrections when there is turmoil in the broader market, because investors start to question whether the underlying companies can grow as quickly as optimists had previously hoped they would. I've identified two stocks trading at sky-high valuations that might be worth selling if the S&P 500 starts to head lower.
Source
Originally published at www.fool.com.