Stocks and M2

Checking in on one of my all-time favorite metrics

The S&P 500 / M2 metric is one of my favorite metrics ever. It’s a great indicator for market valuation and captures the mania of the dot-com bubble and the extreme lows of the Great Recession:

Right now, we see that the market remains fairly elevated despite the market trouble this year. That being said, I would be surprised if we went much lower, unless there was a massive shock to the system. Even COVID didn’t do that much to this metric!

So, if you are waiting to buy a really good dip like we saw in 2008, you might be waiting a while. Sometimes it’s better just to take what’s on the table than to wait and wait and wait.