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How To Keep The Economic Wind's
At Your Portfolio's Back
Buy low, sell high.
It’s always been buy low, sell high.
It always will be.
Today is not the day to “buy low” though.
The chart below is of the Shiller PE ratio.
This is the ratio that smooths out all the short-run market movements.
The ratio’s level will basically tell you if stocks are cheap or expensive at any given time.
If it’s high, stocks are expensive.
If it’s low, stocks are cheap.
Here’s the where the Shiller PE stands today:
The chart shows, relative to earnings which are the most fundamental valuation measure, stocks are expensive.
That doesn’t mean stocks won’t go up from time to time.
And it doesn’t mean you shouldn’t be targeting the coming decade’s big growth opportunities.
It just means the wind isn’t at your back and you should take big rallies as opportunities to build cash reserves and reload during downturns and despair.
Because when stocks are this expensive, there will be downturns. Big downturns. And big profits from the buying opportunities.