Summary
- The S&P 500 is historically expensive, ranking the top 1, 2, or 3 in price-to-earnings, price-to-sales, price-to-book, and dividend yield metrics over the past 60 years.
- The 12-month trailing PE ratio of 25.5 is the fourth highest since 1954, indicating significant overvaluation.
- The price-to-sales ratio of 3.3 is the highest since 1990, and the price-to-book ratio of 5.3 is the second highest since 2000.
- The dividend yield of 1.23% is the second lowest since 1970, suggesting the market is in a late cycle, potentially signaling a bubble.
- Looking for a helping hand in the market? Members of Reading The Markets get exclusive ideas and guidance to navigate any climate. Learn More »
hadynyah
The current S&P 500 could be one of the most expensive markets in history, and four charts can show just that. The price-to-earnings, price-to-sales, price-to-book, and dividend yield all show that this market ranks among the 1, 2, or 3 most expensive markets over the
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Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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