Zillow Inc (Z), American International Group Inc (AIG): Valuation Still Matters… Especially Now

But investors have to be discriminating and keep valuation in mind. On the side of the spectrum, a stock like BofI Holding, Inc. (NASDAQ:BOFI) has absolutely taken off, and now carries a valuation that will provide a stiff headwind to shareholders’ returns in the years ahead. That doesn’t make it a bad company — I believe very much in the impact that technology can have in the banking industry. It just makes BofI a stock better suited for your “watch list” than your “buy now” list for the time being.

Focusing on high-quality, well-run businesses, and investing for the long term are cornerstones of Foolish investing. But, as the market chugs along at a breakneck pace, it’s important to remember that the price you pay is important, as well.

Matt Koppenheffer owns shares of JPMorgan Chase & Co (NYSE:JPM). and American International Group (NYSE:AIG). The Motley Fool recommends American International Group, BofI Holding, and Zillow. The Motley Fool owns shares of American International Group, BofI Holding, JPMorgan Chase & Co., and Zillow and has the following options: long January 2014 $25 calls on American International Group. \

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