The Stock Market Is Flashing a Major Red Flag Seen Only Once Before. Here's What's Different This Time.
How worried should investors be about high stock valuations?
Overview
The S&P 500 (SNPINDEX: ^GSPC) has been on a phenomenal run. The popular index has doubled since the start of 2023, producing huge returns for investors. If you go back further, the S&P 500 is up more than 1,000% from its March 2009 low, producing a 15% annualized return.
That's a tremendous run for the index, and some investors may be wondering if we're approaching a new market peak. That 2009 low was the culmination of a near-decade-long stretch in which the index fell around 50% before recovering, only to fall 50% again. And now, the market is flashing the same major red flag it did just before the so-called "lost decade."
Details
There are important differences between today's market and the stock market of the late '90s when we last saw this warning sign. But that doesn't mean investors can ignore it entirely.
Source
Originally published at www.fool.com.
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