Many financial advisors think the market is way overvalued

That combined with ever increasing world debt, tariff concerns, and a weak dollar make many concerned about an imminent correction. How large of a correction could we have?

My opinion is that a clue may lie in how much of a correction can TQQQ have? TQQQ is important because it represents the 50 fastest appreciating stocks. The highest TQQQ price this year is $110. TQQQ has an annual volatility of 4. A 20% correction in the S&P results in an 80% correction in TQQQ. That would make the price $22. That value is roughly equal to the COVID low price. It is hard to see TQQQ getting that low with it holding so many AI stocks.

Therefore a 20% correction in the S&P seems unlikely. What about a 15% correction in the S&P? That would cause TQQQ to fall to $44. The lowest price for TQQQ this year is $35. This could happen but it is probably the worst case.

If a 15% S&P correction is the most likely worst case, how does the market work off the extremely overbought current situation. Time is probably the best way. We could see multiple corrections that are less than 15% as the market digests the current overvaluation and other uncertainties.

There are some positives that could mitigate corrections such as AI improving productivity.

As usual the best long term investment approach is a good buy and hold strategy.

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