Great Stocks Are Still on Sale, but There's Something You Need to Know First
It seems like investors have turned from pessimism to optimism, as the S 500 is approaching what many market watchers consider to be bull market territory, up over 20% since its recent low in October 2022. Inflation has been cooling for several months now, so the thinking is probably that rate hikes are coming to an end soon. Investors are reacting to this expectation by pushing stocks higher.
As a result, folks might think that lucrative buying opportunities don't exist anymore given many companies' share prices have jumped higher in 2023. But this is a flawed assumption. That's because great stocks are still on sale right now. There's just something you need to know first.
Just because a stock sells for a cheap valuation, it doesn't necessarily mean it's a good investment opportunity. A so-called value trap is a company that might have a cheap price-to-sales (P/S) or price-to-earnings (P/E) multiple, but the underlying business is facing some problems.
Source Fool.com
