The stock market currently stands at historically elevated levels.
With only a handful of companies accounting for an outsize share of the S&P 500’s (SNPINDEX: ^GSPC) total valuation, this concentration creates genuine risk
Widespread enthusiasm surrounding artificial intelligence (AI) and adjacent markets has so far been enough for investors to shrug off any perceived macroeconomic weakness. While this resilience is impressive, every bull market eventually faces a moment when the music stops. The question smart investors are asking is straightforward: What should one do when a bear market arrives?
Understanding the CAPE ratio The cyclically adjusted price-to-earnings (CAPE) ratio measures the market’s current price relative to the average inflation-adjusted earnings over the past 10 years. By smoothing earnings across different economic cycles, the CAPE ratio better filters out the fleeting spikes and troughs that can distort ordinary price-to-earnings (P/E) snapshots. A rising CAPE ratio means investors are paying incrementally more per dollar of earnings.