The Stock Market Is Historically Expensive Right Now. Here's Why I'm Still Investing.
It's understandable to be nervous about high stock valuations. But long-term investors can breathe easy.
Overview
On one hand, all-time highs in the S&P 500 (SNPINDEX: ^GSPC) are good news for investors. Stocks are up, the artificial intelligence (AI) boom is sparking excitement, and millions of American households are building wealth. Everyone should be happy, right?
Wrong. Many investors are feeling nervous right now about the stock market because it's been on such a strong run. They're worried that the bull market can't last much longer and that what goes up must come down. By some widely watched metrics -- like the Shiller cyclically adjusted price-to-earnings (P/E) ratio, or CAPE ratio -- the stock market is looking historically expensive. Future corporate earnings might not be high enough to justify today's high share prices.
Details
As an ominous sign, the S&P 500 index's CAPE ratio hasn't been this high since 2000. That was right before the dot-com bubble burst.
Source
Originally published at www.fool.com.