Tail risk redux

Published: November 28, 2011

Market volatility in 2011 should only heighten investors’ interest in protecting their portfolios from massive equity market drops.

Stocks still overvalued

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Tobin’s q is a measure of the aggregate overvaluation or undervaluation in the stock market. It examines the ratio between the value of the stock market and physical cost to replace those firms. The latest data from the Federal Reserve show that recent overvaluation in the stock market has matched peaks in 1906, 1936 and 1968.
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