Members Cautious About High Stock Valuations


This week’s Sentiment Survey special question asked AAII members what their comfort level with current stock valuations is. (Most of the responses were given before Fed Chair Janet Yellen described stock valuations as “generally being quite high” yesterday.) About three out of every 10 respondents (31%) said valuations are high or that they are uncomfortable with how stocks are currently priced. An additional 16% of respondents described themselves as being cautious or are somewhat uncomfortable with current valuations or otherwise said that stocks are somewhat expensive. Close to 13% described stocks as currently either being fairly or fully valued. Just under 14% of respondents say they are comfortable with current valuations.

Here is a sampling of the responses:

  • “I feel that stocks are somewhat overvalued, but I don’t see a minor bear market for at least six months.”
  • “I think valuations are on the high end, but maybe not at their highs.”
  • “There are many stocks whose price-earnings ratios fit in my comfort zone.”
  • “Valuations are high, but there is nowhere else to get any kind of return.”
  • “The recent economic measurements do not support current stock market prices.”
  • “Stock prices are inflated because capital gains and dividends are the only game in town.”

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