Billionaire investor Warren Buffett, on the heels of releasing his annual report, said, Monday, that the stock market isn’t in a bubble and “measured against interest rates, stocks actually are on the cheap side compared to historic valuations.” In the same interview, he also warned “That doesn’t mean the stock market can’t go down 20% tomorrow.” A buying opportunity he’d welcome with open arms. It’s good to be Warren.
Retirees and savers have carried the burden of low interest rates. Many are simply increasing risk without proper adherence to their own margin of safety.
Brian Hershberg writes at WSJ’s MoneyBeat:
The pinch of low rates. The Dow Jones Industrial Average has tripled since it bottomed out during the financial crisis eight years ago. Meanwhile, men and women who expected to live off income from certificates of deposit or municipal bonds have gotten no relief as interest rates remain low. To compensate, many have turned to riskier assets.
Read more here.
