The Stock Market Has Not Been This Expensive Since the Dot-com Bubble's Peak. History Says to Prepare for What Might Come Next.
Investors who have benefited from the AI boom should now consider potential downside scenarios for their portfolios.
Overview
Every day, the financial media bombards the world with debates about whether the artificial intelligence (AI) bull market has turned into a bubble. Pundits will go on TV and loudly support one side or the other in this argument, often with little fundamental analysis to back them up. This can leave viewers with few ways to assess the stock market's condition outside of vibes.
But how exactly can you quantitatively define when the stock market is overvalued? The best metric to use might be the Shiller Cyclically Adjusted Price-to-Earnings ratio, otherwise known as the Shiller CAPE ratio. And that metric just hit its most expensive level since the dot-com bubble's peak in late 1999 and early 2000.
Details
Here's what that could mean for the AI bull market.
Source
Originally published at www.fool.com.