Should you actually stay away from wildly overpriced stocks?
According to Jeremy Siegel, if you'd invested $1,000 in 1957 in the 100 stocks in the S&P with the highest price-to-earnings ratios, and rebalanced annually, you'd have had $56,700 by 2003; if you'd bought the 100 stocks with the lowest P/Es, you'd have had $425,700. [The S&P 500 index was created in 1957.]
[this article also appeared in the December 2004 issue of Money magazine]
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