Measuring the average American's economic well-being using stock prices

[LondonReign2]

44. Ok, I am going to have to play contrarian here

I do not disagree that the Dow topping 17,000 is an imperfect measure of the average American's financial health. As noted elsewhere in this thread, it does indicate that business is picking up and the job picture is improving, albeit not as rapidly or robustly as anyone would like.

Keep in mind that over half of American households own stock, either directly or through mutual funds. The number was actually much higher pre-Great Recession, though, at almost two-thirds of households. So a rising stock market improves the financial wellbeing for a majority of Americans.

And PE ratios are not particularly nuts right now, not by long-term historical standards. See the chart here http://www.advisorperspectives.com/dshort/updates/PE-Ratios-and-Market-Valuation.php