Personal Finance and Investing

But there are no old bold traders.

The stock market is over-valued for 2 reasons. first the inflation has been low in current years and that resulted in low bond yields. That caused investment money to flow into stocks. Second and more important reason is excessive money printing in DC. Just add up the federal budget deficits for last dozen years. That excess money was not saved, it was spent. Money is like water, it always seeks the final level, for water it is gravity induced lowest level, for money it is stocks.

If the inflation turns out to be not transitory as chair of Federal Reserve forecasted just a few months back, then that will be the Achilles heel for the over-valued stock market. If inflation turns out to be indeed transitory, market can remain at historically high PE's.