pelican

Watch This Sector During the Upcoming Bear Market Rally

"Going back to 1881, the four times that the P/E ratio of the S&P 500 rose above 20, it eventually turned around and didn’t stop falling until it hit single digits. The average of those four trough valuations was 6.4."

I'm not sure four is a big enough sample size. I may flip a coin four times and it may come up heads each time. Also, I'm not sure what the time frames are here. The P/E fell from above 20 in the past to single digits but does that mean the market was lower? If earnings grew 10% annually, then you could have had a 20 p/e market become a less than 10 p/e/ market in eight years with no change in price. Just food for thought.

S&P 500 Price Growth: 1927-Aug 2008

SB-tiger,

The S&P 500 has risen 11 fold since 1980 so I don't agree with you that equity investing has been "a complete scam". I read somewhere that over 80% of all five year periods dating back to the Great Depression has seen the market ahead; over 95% for ten year periods. We are experiencing a second major bear market in just the past eight years, something not too common, so the last ten year period is unusually terrible. I see further downside too, perhaps below 1000 on the S&P, but I plan to go shopping again at some point.