Ep 175: Investing while stocks are “overvalued” (and how to stay grounded)

This week we’re talking about the stock market's latest tantrum and what it means for YOU. (Spoiler: maybe not as much as you think!) 🤫

In this episode we’re breaking down the psychology of fear and hype, and talking about how to avoid getting caught up in the noise while building a long-term strategy that makes you more confident and less stressed.

Takeaways:

• An overvalued stock is one where the price is higher than its actual worth based on its current performance and future expectations.
• Market volatility and fluctuations in stock prices are often driven by market sentiment and short-term traders.
• Forget the hype and focus on fundamentals – For long-term investors, it is important to focus on the core fundamentals of a company and not get caught up in short-term fluctuations.
• Valuation is an art and science – Evaluating stock valuations requires a mix of quantitative measures (e.g., price-to-earnings ratio, price-to-earnings growth ratio) and qualitative factors (e.g., CEO and executive movements, insider trading).
• Long-term investing is about more than money – It's about building confidence and a sense of control over your finances. Diversification, dollar-cost averaging, and focusing on what you can control are key strategies for navigating stock market fluctuations.
• You're in control of your destiny, not the market's – Developing a solid investing philosophy and understanding your risk tolerance is crucial for making informed investment decisions.

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