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Opinion
Nir Kaissar

Valuations Matter, Investors

Fund shoppers often lack a key decision-making tool.

People are worried about U.S. stocks. The S&P 500 is up 251 percent since its post-financial crisis low on Mar. 9, 2009, and valuations look stretched.

One measure in particular is sending a warning signal. As Bloomberg contributor Ben Carlson recently pointed out, the cyclically adjusted price-to-earnings, or CAPE, ratio calculated by Yale professor Robert Shiller has reached 30 for only the third time since 1881 -- the first year for which the CAPE ratio is available. The other two occasions were just before the Great Crash in 1929 and in the run-up to the dot-com crash in 2000.