Is the Stock Market Really Overvalued?

With the strong bull run in stock prices since November, we have been reading more from the perma-bear community about how overvalued the stock market is. With optimism running high among investors we think that a discussion of stock market valuations is timely. But before we get into the meat of the discussion, please understand that valuations are at best a blunt instrument for timing the market. Undervalued assets can become even more undervalued and overvalued assets can become even more overvalued. Valuation metrics like P/E ratios, etc. are best used as caution lights or measures of risk in the markets and are most effective when used by investors as a piece of the overall puzzle, i


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