S&P 500 Index Plummets 4.4%, Market Correction Is a Healthy Process to Prevent Asset Bubbles
- 1The S&P 500 index fell 4.4% on November 5.
- 2The Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio reached 41 earlier this year, exceeding the level of 32 seen just before the 1920 crash.
- 3Between 1928 and 2024, the market experienced at least one 10% correction per year on average.
So what's the key point?
The US stock market index dropped significantly by about 4.4 percent. This occurred because the metric used to measure how expensive stock prices are relative to earnings was higher than it was just before past market crashes.
Source The Motley Fool +1 · View original ↗
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