Nobody knows where the market is going, but we know where it has been. We assume that if there was a higher price in the past, there will be a higher one in the future. For all the boggleheads, long time investors and index fund lovers, this web is a simple metric to put the current asset value into perspective.
Cheap means that the asset price is below a certain threshold relative to the all time high. That is the only KPI to define whether an asset is cheap. Labels are: **CHEAP**: >20% below all-time high **DISCOUNT**: 5-20% below all-time high **NEUTRAL**: Within 5% of all-time high
The objective is not to show real time data, but daily data. The data is cached for a period from 1 to 24 hours and refreshed when the next user enters the page. This ensures the data is always less than 24 hours old.
No, this is just a comparison with the all time high, it is not a signal to buy or sell.
No, it is not, it's just a reference point and you decide what to do with it.
We assume that the selected assets tend to appreciate in the future. Individual stocks are out of the picture as companies are historically very likely to dissapear. We track assets that represent economic growth, or assets that are scarce and have value just because of it limited availability.
This page was created for Bogleheads in mind, that try to follow the full market. Usually they are long time investors doing DCA or regular fund buying. However, for special cycles, the investor may want to invest more money into the market, if the market is cheap. At the same time, if the investor wants to invest a substantial amount of money, they may want to take the relative market place into account.
All-Time High (ATH) represents the maximum price the market was once willing to pay for an asset. Measuring the distance from that peak is a classic way to identify potential value. We assume that the assets showing in this page become more expensive in the long run.
Over the long term, productive assets (like stocks) tend to appreciate due to economic growth, innovation, and corporate earnings. Scarce assets (like Gold or Bitcoin) may appreciate due to monetary debasement and supply constraints. Assets like Bitcoin should follow a similar pattern as gold, but they are extremely volatile and we are yet to see where they end up.
Currently, no. The prices are nominal terms (USD). A drop of 20% in nominal terms might be a drop of 25% or more in real purchasing power terms depending on the timeframe. Please take into acccount that the dollar value decreases over time and that is a factor that explains why asset price in dollars goes up.
Volatile assets (like Crypto) frequently experience -50% to -80% drawdowns. A 20% drop in Bitcoin is common noise, whereas a 20% drop in the S&P 500 is a major correction. We plan to add a 'Volatility Grade' in the future to help distinguish these scenarios.
No, not all assets behave the same way. Some assets are more volatile than others, some are more sensitive to economic conditions than others, and some are more sensitive to geopolitical events than others. Assets are different in nature, and the investor needs to understand very well the definitions of commodities, stocks, index funds, or cryptocurrencies before putting any money in the market.