Stocks Hit Yet Another New High. But Is Market Overheating?

In December 1999, Shiller's CAPE index hit 44.20. (The CAPE's average over the last half century is about 19.58.) We do share this concern that the stock market is expensive, Knapp said. "Were not at all-time extremes, but its on the high side." Indeed, Knapp noted, stocks plunged in late 2008 not because there was an equity bubble. Back then, it was the housing bubble that burst. A financial crisis and a steep economic downturn ensued, destroying corporate profits. "The stock market went down because we had a sharp recession and earnings collapsed, Knapp said. Many professional investors expect a sharp pullback or correction in the stock market once the Fed decides to taper its stimulus program known as quantitative easing. The Fed had been widely expected to taper in September, but the central bank delayed its pullback.

Average 401(k) balance hits record high as stock market surges

Workers who were continuously active in their 401(k) plans for the past 10 years saw their accounts gain 20% in the past year to an average of $223,100, Fidelity said in a news release. For pre-retirees age 55 or older who have been active in their plan for at least 10 years, the average balance was $269,500, the company said. Photos: Top 10 Southern California companies The gains were due in large part to the stock market, which has been on fire this year. The broad S&P 500 index is up 25% year-to-date and has more than doubled since bottoming out in 2009. In the past few decades, many employers have phased out company-funded pension plans in favor of 401(k) accounts, in which employers and workers stash pre-tax cash to help fund employees' retirements. Many workers have expressed confusion about the myriad investment options in the accounts. Fidelity said it has seen an increase in the use of target-date funds, in which investment firms model ideal stock and bond read more... holdings based on workers' estimated retirement dates. One-third of employees in Fidelity 401(k) accounts now utilize target-date funds, up from just 3% 10 years earlier, the company said.

Why Id Rather Buy a House than Invest in the Stock Market

You can paint your living room hot pink. Granted, belonging to a Homeowners Association would limit some of the cosmetic changes you can make to the exterior of your property, but inside, you are king of your castle. Renting, on the other hand, essentially puts your life in the hands of a landlord, a person who cares very little about your well-being. It doesnt mean landlords are bad people, its just that your home is their business. Landlords can raise rent or kick you out if they so choose. Some do a shoddy job of maintaining the property. Many are unpleasant to deal with. And God forbid you spill red wine on the carpet and lose your security deposit.