Stock Market Sell-Off: 5 Magnificent Stocks I Already Own That I'm Waiting Patiently to Add To
The most attractive stocks to buy are often the companies you already own.
Every so often, Wall Street reminds investors that stocks don't move up in a straight line. In span of roughly three weeks, the ageless Dow Jones Industrial Average, broad-based S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite have respectively sold off by 7.2%, 9.3%, and 13.1%.
This sell-off isn't the least bit surprising given how far beyond historic norms stock market valuations have risen. Based on the S&P 500's Shiller price-to-earnings (P/E) Ratio, Wall Street's most-followed stock index recently traded at its third-highest premium during a continuous bull market when back-tested to January 1871.
Though I remain a long-term optimist and recognize that high-quality businesses increase in value over long periods, I'm not oblivious to the historic correlation that Wall Street's major stock indexes tend to fall 20%, or greater, when the Shiller P/E Ratio becomes notably extended to the upside. This is to say that I'm eagerly on the hunt for a bargain, but also not itching to the pull the trigger on most stocks just yet.
