The U.S. stock market today is characterized by a seemingly unusual combination of very high valuations, following a period of strong earnings growth, and very low volatility.
What do these ostensibly conflicting messages imply about the likelihood that the United States is headed toward a bear market in stocks SPX, -0.30% ?
To answer that question, we must look to past bear markets. And that requires us to define precisely what a bear market entails. The media nowadays delineate a “classic” or “traditional” bear market as a 20% decline in stock prices.
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