The rise in equity prices has been dramatic and should give one pause in evaluating future market appreciation. The S&P 500 has risen 166% to new highs and the Dow Jones Industrials rose 146% from the depths of March 2009. The tech-laden NASDAQ Composite, which had decreased by more than 50 % from the previous market peak in the fourth quarter of 2007, has risen 213% from the market lows of 2009. There are many variables that affect security pricing; including global, domestic macro and political events. Do the significant price increases in the market indices translate into equally significant valuation excesses? Addressing key factors will help draw conclusions as to how to best view the horizon.
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