We know that most stocks were overvalued before the 2008 crash. So just how undervalued are stocks today?
Maybe by as much as 30%, says Wharton professor and WisdomTree Investments senior advisor Jeremy Siegel.
“Stocks are 25% to 30% below what I’d call ‘fair market value’ and that might be conservative in terms of earnings power and relative interest rates. Even if we have a recession, I think this is a cheap market,” says Siegel.
While many financial analysts predict another market crash, optimists like Siegel may have history on their side.
From the mid 1980s on, when the VIX spikes, stock values jump within three months. How high?
The VIX hit 44 at the end of August. Looking over the over past 25 years, stocks increased in value by a whopping 80% just three months after the VIX hovered around 44.
You know the old adage, “Buy low.” If history and the VIX are indicators, the next couple of months may be a prime opportunity.
Are you bullish or bearish on the stock market right now? Let us know about it below.
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