Are Stocks Undervalued Right Now ?
In 2008, the U.S. stock market went from gangbusters to just plain busted: The world’s most watched equity index, the Dow Jones Industrial Average, plummeted 30%, while the S&P 500 plunged 45% to an 11-year low. All in all, it was the most severe annual loss for both indexes since the Great Depression. Does it mean that the stock market is under valued ? Is this the best time to load up stocks ?
As you can see, present stock market valuations are nowhere near the underrated levels reached in 1932, at the end of the Great Depression. Not only that, they still stand well above the “Normal Range” of valuation seen during the bulk of the market’s existence.
Make no mistake: No matter how powerful and persistent the bear market rallies are from this point forward, this is still very much a bear market.
Source: Elliott Wave