The article says the S&P 500 is up 78%, the Nasdaq Composite 99% and the Dow 53% over the past three years, but warns that the Shiller CAPE ratio has risen sharply to nearly 41, far above its historical average of 17.8, which it says signals overvaluation. It notes that most recent gains are concentrated in AI stocks: the S&P 500 is up 17% over the past year, yet four in 10 of its stocks have fallen this year. As a long-term strategy, the article suggests the Vanguard S&P 500 ETF (VOO), which diversifies across sectors, and notes the S&P 500 has averaged 10.5% annual gains since 1957. Citing J.P. Morgan research over 20 years, it argues that staying invested during downturns has historically produced higher returns, since 7 of the 10 best market days occurred within two weeks of the 10 worst days.
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