Part 5/11:
Market experts point out that if valuations were to be repriced sharply downward, the repercussions could ripple across the entire economy. Such corrections might reverse the investment surge seen in 2024, weaken consumption, and dampen economic activity. Historical precedents, like the tech bubble burst of 2000, serve as cautionary tales.
Currently, estimates suggest that stocks might be about 10% overvalued on average, though this is significantly less than the 20% stretch observed during the 1999 tech bubble. Nonetheless, the high concentration of tech giants within indices amplifies market risks; large swings in these stocks can disproportionately influence broader markets.