I’ve posted Entry #509 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Considering Valuations Does Not Make a Stock Investor More Fearful.
Juicy Excerpt: I would not be afraid to invest in stocks after a price crash. I have just as much confidence that stocks will perform well starting from a low CAPE level as I have that they will perform poorly starting from a high CAPE level. And I would not be concerned that the price crash was due to some economic issue that might not yet be resolved. It is shifts in investor emotion that cause price changes, not economic developments. I wouldn’t feel able to say when prices would start moving upward any more than I today feel able to say when prices will begin moving downward. But when the CAPE level was low I would feel confident that the long-term direction of stock prices would be upward.
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