Is the Stock Market a Bubble?

The market has been great to investors for the past six years. Stocks are up over 200% since the 2009 lows and the Dow is once again trading above 18,000 and the S&P 500 is just hit a new record. The U.S. economy has being holding on strong with the jobs market  looking strong and corporate earnings continue to beat expectations.

As goods become more expensive we tend to buy less but when assets become more expensive we buy more. As the stock market soar the more we have a tendency to buy. This type of activity is what leads to a bubble being formed. But stocks are barely positive on the year. Valuations look a bit lofty, but not too high.

Leave a reply

Your email address will not be published. Required fields are marked *