Reversion to the mean

"Mean reversion" or "reversion to the mean" refers to the concept that every asset class cycles between being overvalued and undervalued, but in the long run returns to (reverts to) a mean valuation. This includes stocks, real estate, commodities, collectible art, coins, gems, cars, any asset class. The goal is to buy ...an asset when it is undervalued and sell it when it is overvalued. Many experts believe that real estate is presently undervalued, while stocks and mutual funds are overvalued.