When the Next Bear Market Begins, This Is the First Investing Move I'm Making
Key PointsA key indicator says the market hasnʻt been this overvalued since 1999.
As the Shiller P/E ratio reaches unprecedented heights, signaling a potential bear market, the author's first action is to seek out undervalued companies. Much like Nvidia in 2009 and Micron Technology in 2022, the author believes that certain stocks will return to more reasonable valuations after a market correction. Warren Buffett's adage, to be fearful when others are greedy and greedy when others are fearful, underscores the importance of selective investing during such volatile times.
While broad market ETFs may not be the wisest choice, actively managed ETFs and individual stocks with strong earnings potential could present attractive opportunities. The author cites Microsoft and Apple as examples of companies that saw significant gains after their P/E ratios dropped during past bear markets. To capitalize on such moments, the author advises looking for companies with promising growth prospects and waiting for the market to correct, allowing these stocks to return to more normalized valuations.
Written by urgent.news from Yahoo Finance's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
