It feels a little like investors have returned from their August beach holiday, and, with a fresh pair of eyes at the start of September, looked at the stock market and its valuations and once again started to question whether we are in the midst of an equity market bubble. In the last few weeks, we have had a large number of investors sending us uncomfortable looking charts of stock market valuations as proof the market is in bubble territory.
In this Economics Weekly we again discuss the issue of a stock market bubble, with the view that parts of the market are very richly valued on some measures and market return expectations should be tempered, but today’s market would not yet seem to qualify as a bubble.