Stocks are trading near their cheapest levels in almost three decades. It's a buying opportunity if you're brave enough to face the risks that have scared off investors lately.
S&P 500 stocks are trading at a price-to-earnings ratio of about 13 times their expected earnings for the next 12 months, according to the research firm Birinyi Associates. Going back to 1990, the average has been around 19; the lower the P/E ratio, the cheaper the stock is considered.
Except for the market meltdown from late 2008 to early 2009, stocks haven't traded at such a cheap level since 1982, when the price was about eight times expected earnings.
***
[8/2/10] Or is the market overvalued?
***
[8/13/10] gurufocus says market is fairly valued (as of this writing)
No comments:
Post a Comment