After years of record-breaking growth, major market indexes are stagnating.
The S&P 500 (SNPINDEX: ^GSPC) is down 0.42% over the past month, as of this writing, while the tech-focused Nasdaq Composite (NASDAQINDEX: ^IXIC) has sunk by nearly 2% in that time
Some market indicators are also raising red flags over valuations. The S&P 500 Shiller CAPE Ratio, for instance, is the highest it’s been since the dot-com bubble, suggesting the index is trading at a premium. The Buffett indicator is also at a record high of 236%.
For context, Warren Buffett himself noted that when this indicator nears 200%, investors are “playing with fire.” Now, this doesn’t mean that a bear market is around the corner. But downturns are a normal part of the market’s cycle, so it’s not a matter of if we face a pullback, but when. Here’s my number one piece of advice about how to prepare right now.