Making sense of high share prices

It is hard to determine whether the stock market is dangerously high or a relative bargain.
It is hard to determine whether the stock market is dangerously high or a relative bargain.PHOTO: EPA-EFE

(NYTIMES) - The stock market is already quite expensive. That is evident when you compare current stock valuations with those from previous eras. But it is also true that stock prices are fairly reasonable now.

That seemingly contradictory conclusion arises when you include other important factors: interest rates and inflation, which are both extremely low.

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