The Stock Market Is Flashing a Warning Signal So Rare It's Only Appeared Once Before. Here's What History Says Comes Next.
History has good and bad news for investors right now.
Overview
After months of turbulence, the stock market is surging again as investors gain renewed optimism. The S&P 500 (SNPINDEX: ^GSPC) and Dow Jones Industrial Average (DJINDICES: ^DJI) both reached new record highs in August, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) is also inching toward a new peak, up by nearly 10% since late July alone.
The drawback to surging prices, however, is that this is the most expensive the stock market has been in decades. Not only are stock prices themselves climbing, but valuations are also reaching staggering new heights -- increasing the risk that some stocks are overvalued.
Details
Valuations aren't an exact science, so it can be tough even for the experts to gauge whether the market is in bubble territory. That said, there's one valuation metric displaying a pattern that has only been observed during the lead-up to the dot-com meltdown. Here's what investors need to know.
Source
Originally published at www.fool.com.