This Is the Most Expensive Market in Decades. Is It Really Safe to Invest Right Now?
Key PointsIt can feel bad to buy stocks when they're valued very richly, like now.
The stock market currently feels like it's priced for perfection, with the Shiller P/E ratio at 42, near its late-1999 peak of 44. This high valuation came before the Nasdaq's 77% decline in 2002. The Buffett indicator, which compares stock market value to GDP, has also hit a record high of 234%.
Even heavily diversified investments like the SPDR S&P 500 ETF Trust (SPY) may seem risky in such a high-priced environment. Investors entering the market now are assuming certain outcomes that may not be accurate. Let's examine if investing in stocks at this time could still be a profitable move.
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