If There's a Stock Market Crash Ahead, History Highlights the Best Strategy for Investors
Long-term investors shouldn't fear a bear market.
Overview
I have bad news for anyone planning to buy stocks today: There's a stock market crash coming in your future. Whether the crash starts tomorrow, in 10 years, or sometime in between, though, is anyone's guess.
That said, there are a few reasons to expect it could be sooner rather than later. For one, stock valuations are stretched. The cyclically adjusted P/E ratio for the S&P 500 (SNPINDEX: ^GSPC) is near its all-time high, last seen at the height of the dot-com bubble. The Buffett indicator -- the ratio of the U.S. stock market capitalization to its GDP -- is at a record high as well.
Details
On top of that, the index is heavily concentrated in big tech stocks related to AI, so a single crack in the AI story could send the entire market tumbling.
Source
Originally published at www.fool.com.