I keep hearing people talk about how the S&P 500 is overvalued here at all time highs but I’m wondering how that makes sense?
In the long-run, I assume overall there will be growth. Up and to the right over the long-term. Eventually, the ATH will need to be breached (as it has), but why does that mean it’s “overvalued”?
Why can’t it be appropriately valued and the grind up continue?
It seems anytime the ATH has been approached, and now that it’s surpassed, people claim it’s overvalued.
Is the expectation for it to forever rise up to its previous ATH, then crash and grind back up to that same previous ATH, only to crash again and repeat? And the only people making $ are the ones timing those dips, riding back to that top, and then selling?
Isn’t the idea for it to surpass the ATH and continue grinding upwards and onwards?
As software and AI continue to eat the business world, productivity should theoretically increase for companies, and as productivity increases revenue and profitability should as well, and as profitability and revenue increase stocks go up over the long-term.
The software market size is predicted to grow by $1 trillion come 2030, currently at ~$700b, and tech adoption from companies in the S&P 500, many of which are “laggards” on the adoption curve for enterprise software, should result in the productivity gains and increased profitability mentioned.
It seems people think there is a “perma-top” for the market and once that is surpassed, it’s overvalued and a crash is imminent. Why can’t it just continue rising over the long-term?
