Is the S&P 500 Historically Expensive or Cheap? The Answer Depends on How You Look at It.
Stocks look both historically cheap and expensive, depending on the metric you use.
Overview
The valuation of the S&P 500 (SNPINDEX: ^GSPC) has been a hot topic lately. By some measures, the index looks historically pricey, trading at levels rarely seen before. At the same time, the S&P 500 is trading at a historically low PEG (price/earnings-to- growth) ratio.
Let's take a close look at whether the market is overvalued or undervalued.
Details
Based on two popular market valuation metrics -- the Buffett indicator and the S&P 500 Shiller CAPE (Cyclically Adjusted P/E) ratio -- the market is trading near record valuations. You often see these metrics cited as a reason for a potential bear market.
Source
Originally published at www.fool.com.
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Data may be delayed up to 15 minutes. Past performance is not indicative of future results. Consult a licensed financial advisor before making investment decisions.