The Stock Market Looks More Expensive Than Ever Before Based on Certain Measures, and Warren Buffett's Timeless Advice Has Never Been More Valuable
Expensive stocks can be risky, but not uninvestable.
Overview
Over the last four years, the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) have been practically unstoppable in their continued march higher. Despite a number of potentially dislocating events, investors have bought into stock price pullbacks, pushing the indexes to new all-time highs this year.
But as the bull market approaches its four-year anniversary, stocks, as a group, have never looked more expensive. Twenty-five years ago, as the dot-com bubble popped, Warren Buffett shared a simple metric he called "the best single measure of where valuations stand at any given moment." Today, that metric is hitting new record highs, indicating a severely overvalued stock market. Luckily, Buffett's timeless wisdom can also point investors toward market opportunities.
Image source: Getty Images.
Details
Source
Originally published at www.fool.com.