Posted by investingtalk > 2013-12-12 16:05 | Report Abuse

Despite the stock market moving into record territories, former Fed Chairman Alan Greenspan said recently that he does not see a bubble forming in the US market. He also said that economists that are forecasting the US economy to grow by 2.5% to 3% next year may be too optimistic. Many will still remember that in 1996 Greenspan used the words " irrational exuberance" to describe the market bubble. The market did collapse, albeit only a few years later after the dot.com bubble burst. The stock market is now 140% higher than when Greenspan made those comments, although the earnings of the market has also picked up significantly in the last 17 years. Looking at current market levels, it seems right to say that while it is not in " bubble" territory, valuations do look a bit stretched by historical standards. * The market proxy is a basket of 20 large cap stocks in the US market that is tracked. This proxy is a good mirror image of the entire US market as represented by the S& P 500. To view the valuation chart go to http://www.investingtalk.net/is-bubble-forming-in-us-market.html or https://www.facebook.com/investingtalk