How to Invest in an Overvalued Market

Study: The market is booming but a recent survey from Bank of America shows that many investors are feeling cagey about climbing stock prices. This would touch on how to invest wisely if you feel worried about increasing valuations. 1. At what point would an overvalued market reach a tipping point? In other words, when should investors begin to worry, if at all? 2. How can investors identify sections of their portfolio that may be overvalued? 3. What’s the best strategy to balance out a portfolio when there are concerns about overvaluation? For example, is moving more of your investments into cash a good way to downplay exposure to volatility? What about bonds or international stocks? Are those things investors should be looking to in the current market? 4. How important is your time horizon when choosing the best investment strategy in a market environment like the one we’re facing now? 5. What’s the one thing an investor shouldn’t do if they’re worried about market overvaluation?