[CHART] How Stock Pickers Can Make a Killing When Valuations Soar

  • Stock are at their highest valuations since the 2008 crisis.
  • This strategy is your key to unlocking triple-digit gains even when valuations soar.

Stock prices shattering record highs are usually great for your portfolio, but an overheating market makes it even trickier for investors to find the right stocks to buy.

After all, buying in during the market's peak is a recipe for the most disastrous mistake in investing: buying high and selling low.

That's why CNBC found just 17% of millionaires will be adding to their stock holdings this year.

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Unfortunately, they're making a huge mistake.

And while the super wealthy might be able to coast along on their bank accounts, the rest of us simply can't accept middling returns. Even if valuations are through the roof.

Let's take a look at what's going on, and how you can get an edge...

Why Some Investors Are Moving to Cash - And Why That Could Cost Them

Valuation metrics simply tell us how much bang for your buck you're getting for each stock. It tells you if you're paying too much - or too little - for a stock compared to the rest of the market.

Investors are leery of overpriced stocks because they think the stock has no room to run higher. Others think high valuations across the board portends a drastic downturn in the future.

Take a look at how some of the most common valuation metrics compare to the stock market in 2007, just before recent market downturns...

stock valuations

As you can see, the S&P 500 Median Price/Sales is nearly double its level in 2007, and the S&P 500 Cap-Weighted Price/Sales is right at its Dot-Com Bubble height.

With valuations soaring to pre-crisis levels, and even higher, it's no wonder rich investors are pulling their money out of the market.

They are content with waiting for valuations to return to earth before buying back in again.

But just because a few stocks are pulling up the averages to record-highs doesn't mean there are no stocks worth buying.

In fact, you can find some of the best growth stocks on the market for bottom-barrel prices right now.

By following this strategy, you could bag triple-digit gains even while the market shatters valuation records...

How to Find Huge Gains No Matter What the Market Is Doing

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Looking at broad valuation metrics can be helpful for gauging investor sentiment, but it can also cause you to overlook some of the most incredible stocks on the market.

Think about the market one year ago. Valuation metrics were just as high as they are today, but putting your money into cash then was a doubly losing play. Not only did you miss winning stock picks, but you sacrificed your portfolio's value to inflation.

Negative returns are simply not going to cut it in today's market.

And you didn't just miss the Dow's healthy 17% growth over the last year, you missed out on the chance for life-changing profits.

The Chefs' Warehouse Inc. (Nasdaq: CHEF) grew 119.35%, Sify Technologies Ltd. (Nasdaq: SIFY) jumped 143%, Fanhua Inc. (Nasdaq: FANH) rocketed 245%, and Boot Barn Holdings Inc. (NYSE: BOOT) exploded for 260% growth over the last year alone.

You see, even though broad market valuations were sitting at all-time highs, the Money Morning Stock VQScore™ identified the stocks with serious growth potential.

Instead of heading for the sidelines when the media goes into hysterics over record-high valuations, turn to the VQScore to find stocks with triple-digit potential flying under the radar.

Click here to see all of our top rated stocks, and you'll automatically get free updates on our top stock picks, based on our proprietary rating system, the Money Morning Stock VQScoreTM.

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