I hope you’re sitting down, folks, because I have some news that could be upsetting to some of you: A stock market crash or steep correction may be coming.
With the coronavirus crash — a 34% decline registered in the benchmark S&P 500 (SNPINDEX:^GSPC) over just 33 calendar days during the first quarter of 2020 — still fresh in the minds of many investors, the last thing you probably want to think about is a repeat performance. Yet, history tells us that’s likely where we’re headed. But as you’ll soon see, crashes and steep corrections aren’t necessarily events to fear.
A crash or steep correction may be closer than you realize
If there’s one historic figure that sticks out like a sore thumb, it’s the S&P 500’s Shiller price-to-earnings (P/E) ratio. The Shiller P/E looks at inflation-adjusted earnings over the previous 10 years. Looking back 151 years, the…