Even S&P 500 Companies Know They are Overvalued

Palisade Research August 22, 2017
Category: Research

Its no secret that investors buy gold as a hedge against falling stocks. However, investors are very reactionary, accumulating gold after stocks have begun their initial decline:

 

This pattern of buying is apparent when looking at the two previous recessions, the first spurred by the dot-com bubble, and second the Worldwide credit crisis.
Since its incredible recovery since 2009, the S&P 500 has set a record high. Company valuations are now so bloated, that even the companies themselves think the same thing:
 
 
A buyback is when a company purchases some of their outstanding shares. Its one method a company generates value for shareholders, and also allows them to invest in themselves when they think they are undervalued. For S&P companies, this number is dropping drastically. Obviously, they know something general investors do not.
Will you be a reactionary gold investor, or begin preparing for the inevitable pullback in stocks now?

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