Volatility in the stock market has picked up in the last few months of 2014. Concerns about global economic growth, the health of emerging markets, geopolitical tensions, and plunging oil prices have investors on edge.
As of mid-December, the median stock in Morningstar's coverage universe was trading 1% below our fair value estimate. Other measures of market valuation--such as the Shiller P/E--are still elevated, but less so than last quarter thanks to steady earnings growth and moderating stock prices.
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