If a Stock Market Crash Is Coming, These 2 Growth Stocks Might Be Worth Selling
Stocks with lofty valuations can be extra vulnerable when the broader market suffers a correction.
The S&P 500 index has more than doubled since its bear-market low in 2022, driven by the artificial intelligence boom. However, the index currently trades at a high Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio of 41.9, indicating it is one of the most expensive markets in history. Geopolitical tensions, high inflation, rising bond yields, and the upcoming midterm elections in November may prompt investors to reduce their market exposure.
High-valued stocks are particularly vulnerable to steep declines during broad-market sell-offs, as investors often sell their biggest winners and reduce portfolio risk. Two popular technology stocks with high valuations may be worth selling if the S&P 500 begins to decline.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
