The S&P 500 is still up about 12% this year but has fallen nearly 2% from its record high set earlier this month, while the Nasdaq Composite is more than 4% below its high, as sticky inflation and rising bond yields weigh on investors. The Shiller CAPE ratio has stayed above 40 for a few months, a level reached only once before in 155 years of data, during the dot-com bubble, versus a long-term average of about 17.4. The U.S. stock market's value relative to GDP stands near 244%, above the 200% threshold Warren Buffett once warned means 'playing with fire.' The author suggests investors should lower expectations for returns over the next decade, but says a crash is not guaranteed. As an example, $1,000 invested in an S&P 500 ETF at the March 24, 2000 peak would have grown to more than $5,000 today, before dividends.
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