Valuation levels aren’t a predictor of market corrections

“Many investors fear that higher valuations suggest that a bear market is imminent. But history suggests that bear markets more often result from factors external to the stock market, such as recessions, wars and credit bubbles. There have been ten pullbacks of approximately 20% or greater since the 1920s.

Instead of trying to time the next market correction, investors should stay diversified to protect one’s portfolio against unforeseen market shocks”.

Sources:

https://about.jpmorganfunds.com/insights/3-charts-to-explain-why-investors-should-favor-stocks/

https://www.jpmorganfunds.com/blobcontent/834/1000/1323410660005_MI-GTM_2Q15-HighRes-14.png

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