These 4 Growth Stocks Are Screaming Buys If the Nasdaq Crashes
Don't look now, but we might be on the verge of a full-fledged crash in the technology-reliant Nasdaq Composite (NASDAQINDEX: ^IXIC).
At the end of 2020, the Nasdaq 100 -- an index of the 100 largest non-financial companies listed on the Nasdaq exchange -- was sporting a cyclically adjusted price-to-earnings (CAPE) ratio of 55.3, which is well above its historic norm. The same could be said for the benchmark S&P 500, whose Shiller price-to-earnings ratio (another name for the CAPE ratio) hit its second-highest reading ever.
It's not just valuation that's a concern, either. A September Harris poll found that 43% of retail investors are utilizing some form of leverage (either buying equities on margin and/or purchasing options contracts). Leverage can be wonderful when equities are moving in the right direction, but retail investors attempting to time the market has never worked out over the long term. If a margin call wave were to hit retail investors, the Nasdaq could be swept up in the downside frenzy.
Source Fool.com
