Prediction: A Stock Market Crash Is on the Way. Investors Who Do This 1 Thing Can Still Come Out on Top, Based on 155 Years' Worth of History
Time-test valuation tools indicate a stock market crash could be on the horizon.
Overview
The past few years have been a gift for anyone who stayed invested instead of booking gains. Between the start of 2023 through late September 2026, the S&P 500 (SNPINDEX: ^GSPC) has compounded at roughly 21% a year, while the Nasdaq Composite (NASDAQINDEX: ^IXIC) and Dow Jones Industrial Average (DJINDICES: ^DJI) have gained 29% and 12% per year, respectively. These are the kind of numbers that make investors feel invincible.
Most of the big winners have come from artificial intelligence (AI) -- the chips, cloud platforms, and software wrapping itself around every business process. The indexes are climbing largely because a handful of giant companies keep delivering monster earnings and the market is paying up for the next chapter.
Details
Generational runs never last forever, though. A couple of long-standing valuation gauges now sit at levels that have historically preceded weaker returns. A stock market crash does not need to be right around the corner to still matter, but momentum traders who treat every dip as a buying opportunity in the same popular stocks are setting themselves up to get blindsided. Nevertheless, there is a way to stay invested through market turmoil and still come out ahead, and it's not by chasing the flashiest AI upstart.
Source
Originally published at www.fool.com.