Is The Us Stock Market Overvalued?

Discussion in 'Stock Market Forum' started by longtermbull, Jul 12, 2018.

  1. longtermbull

    longtermbull Administrator Staff Member

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    While interest rates in the US have increased of late, we are still living in a low interest rate environment where debt is cheap for both individuals and companies. As in when we move slowly back towards more “traditional” interest rate levels, do you expect a correction in the US stock market?
     
  2. Chartman

    Chartman Senior Investor

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    This is a very delicate move for all governments/central banks around the world. If they move interest rates too high too quickly this will kill new funding and massively increase financial expenses on existing variable loans - stunting business growth at best and pushing some to the wall at worst. Leaving rates too low for too long could lead to a boom and bust scenario and store up significant problems for the future.
     
  3. gowiththeflow

    gowiththeflow Senior Investor

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    It is difficult to say whether the US stock market is overvalued until we see how companies and profits react when interest rates do move back towards their more traditional levels. At this moment in time I personally think that US stock markets are focusing on the potential positive is going forward and ignoring concerns are confusion, predominantly centred round trade tariff wars.
     
  4. longtermbull

    longtermbull Administrator Staff Member

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    There is an awful lot to consider when arriving at a “proper” valuation for the US stock market in your head. The bottom line is nobody has been in this situation before, historically low interest rates, and therefore there is limited experience as to what will happen and how this will impact stock markets. One thing we do know, the waters will be choppy in the medium term!
     

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