The question as to whether U.S. stocks are currently overvalued continues to trouble global markets. This is especially true as stocks have seen much higher volatility so far in 2015. Here’s a quick answer: on an abstract and historical basis, stocks seem to be overvalued. The most common analytical tools for measuring stock market attractiveness continue to be price-to-earnings ratio and the discount cash flow analysis (DCF). As tried and tested as these tools are, without understanding the context of the investment atmosphere, any determination of stock market valuations is apt to be wrong.
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