Quantcast
Are you getting the best rate from your broker?
Compare your broker's rates now to find out if you can save money

Choose your broker below
Welcome to Dividend.com. Please help us personalize your experience.

Select the one that best describes you
Dividend logo

For those of you old enough to remember the dotcom boom – and subsequent bust – the period of time can be summed up by a lack of substance. Firms during the period were judged solely by their ability to generate sales. If a stock was selling more and more routers, semiconductors or pet supplies online, it was worthy of higher and higher valuations.

Well, we all know how that turned out for the Pets.com sock puppet. A straight shot downwards, and then doing commercials for subprime auto lenders.

The key was that investors forgot about earnings when looking at stocks during the dotcom boom. The problem is, we might be doing the same thing these days. Prices have risen, but the “E” in P/E hasn’t.

While we are nowhere near the triple-digit P/Es of the dotcom boom/bust, the lesson still rings true. Focus on earnings and the investment will take care of itself.

Riding High on Euphoria

After roughly six years of gains, the market may be getting a tad expensive. And it’s only gotten worse since the so-called “Trump Bump” has persisted. Since the election of Donald Trump as president, stocks have hit new record highs and it doesn’t look like they’re stopping anytime soon. The thing is, corporate profits haven’t exactly been surging to justify the higher prices.

To read the Full Story, Go Premium or Log In

Popular Articles

Premium Shutterstock 622553426%20%282%29
News

Forget CAPE, U.S. Stocks Can Still Rally

To put it bluntly, the last few years have been darn good for large-cap U.S. equities. The...

Premium Shutterstock 39685645
News

The Market Wrap for October 20: Bipartisan Deal Sparks Hope

Markets experienced another week of record highs and the Dow closed above 23,000 marks for the...

Dividend Investing Ideas Center

Industries We Can Go Long/Short on During Hurricane Season

The 2017 Atlantic hurricane season has been a highly active one, with multiple storms wreaking...