Stocks are setting repeated highs, reigniting a perennial debate among investors about whether they are too expensive.
The S&P 500 has climbed 5.4% to start 2024 and closed above 5000 for the first time Friday, its 10th record of the year. The Dow Jones Industrial Average has risen 2.6%, setting 11 records along the way.
When trying to gauge whether a stock or index appears cheap or pricey, strategists recommend that investors use a combination of metrics, along with weighing the economic conditions, the overall financial health of a company and the industry’s record. Investors are typically willing to pay more for companies they anticipate will expand rapidly than those whose growth prospects are more limited.