The S&P 500 has risen about 11% this year, while its Shiller P/E (CAPE) has been above 40 every month since May, something that before this year happened only from January 1999 through September 2000. Of the 21 months with CAPE above 40, 11 of the 12 readings from 1999 were followed by gains over the next year, while all nine readings from 2000 were followed by declines of around 3% to over 25%. Five years later, all 21 readings were lower, down about 6% to 22%, and ten years later all were still lower, by about 18% to 43%. The index hit a low of 776.76 on Oct. 9, 2002, and from both early start dates it took over 12 years to get back above its starting level for good. The author says the episode is worth considering but does not treat the ratio as a basis for timing investments.
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SPY
▼ Likely negativeSPDR S&P 500 ETF
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/30/2026 | 755.71 |
| Change that session | -1.77% |
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