Like many things in America right now, the U.S. Stock Market isn’t doing great. Many economists and financial advisers have been expecting it to fall hard, the question was when. On Tuesday, the Dow Jones industrial average fell 362 points, and people are expecting it to keep falling.
Right now, economist Michael Snyder states that even after this huge dip, the market is still rather overvalued.
“the only two times in our entire history when stocks have been this overvalued were right before the stock market crash of 1929 and right before the dotcom bubble burst. Not even before the financial crisis of 2008 were stock valuations as absurd as they are right now.”
This may be the mark before a large-scale financial crisis. many analysts are openly stating that our current market trends are not sustainable and that we are becoming increasingly susceptible to another crash. Art Hogan, chief market strategist at B. Riley FBR had this to say.
“We’ve had a unilateral move higher [in stocks] to start things off and people are realizing this is not sustainable. You’re also seeing some cracks in the global story with interest rates rising.”
What does that mean for us? Some investors believe its a bump in the process, others fear the risk. Stock prices need to drop by about 50 percent in order to achieve the market’s long-term averages, and as wild as the ride may be, they always return to those averages eventually. Nothing about the long-term outlook has changed.
I am not a financial adviser, so it would be unwise to give advise on this scenario, just as it would be unwise to take advise from me about it. I can inform the viewers, at least. So whatever you decide to do, I hope this helps.