With the Fair Value Calculator method, you invest in stocks that are actually worth more than they currently cost. However, if you buy into a currently overheated market, Fair Value stocks could suffer from a negative market environment. Especially large stocks with a high market volume have a high correlation to the development of the overall market. To improve your investment and to assess whether the market is cheap or expensive, it is worth taking a look at the here presented market watch.
RED - Market overpriced and overvalued.
A market correction must be assumed.
Stock prices have risen exponentially compared to the real economy. Here a bubble threatens to burst!
We advise against a current investment in shares.
less than 0,75 points
0,75 - 1 points
more than 1 points
Shaded areas indicate U.S. recessions.
The comparison of the "Wilshire 5000 Full Cap Price Index" and the Gross National Product provides information on whether the market is currently cheap or expensive. Here, the total market volume of a market is compared with the sum of all real goods and services in the same market.
This allows a causal comparison between the stock market and the real economy.
The charted watch chart here compares US GNI to the Wilshire 5000 Index, which also represents the US overall market. The BNE / GNP includes all real US goods and services, the Wilshire Index 5000 the market capitalization of all stock companies in the market. So, the true value is compared to the stock market value, as we pursue in the Fairvalue Calculator Investment Strategy. An additional trigger would therefore be an investment in an undervalued market.
Disclaimers: fairvalue-calculator.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on fairvalue-calculator.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The experts may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall fairvalue-calculator.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on fairvalue-calculator.com, or relating to the use of, or inability to use, fairvalue-calculator.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way.